Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

Re:Robinhood Crypto – Invest in Bitcoin and other cryptocurr... by SteveGregory on Thursday January 25, 2018 @11:56AM (#16232315)

I think the feature makes lots of sense for Robinhood from a business perspective, but I cannot see the majority of Robinhood users fully understanding the risks of buying cryptocurrencies as an investment. It feels similar penny stocks and late-90s tech IPOs in that the price is driven primarily by uncertainty/unknowability in outcome and hype from recent returns.

Also I'm curious if Robinhood Gold (Robinhood's version of margin accounts) will work here, letting people easily borrow money to buy cryptocurrencies. This seems particularly dangerous for a product targeting small/layman investor.

[ Parent | on HN ]

Re:Robinhood Crypto – Invest in Bitcoin and other cryptocurr... by gonzoflip on Thursday January 25, 2018 @12:17PM (#16232508)

I agree that margin trading on Cryptocurrencies is extremely risky and not fully understood by the majority of people doing it. I am very anxious to see what will happen in the long term since so many people hopped on the bandwagon in the past 2 months and I believe a quite large portion of them went into credit card debt to do it. I have been telling people I know personally that I thought Coinbase allowing the use of credit cards to purchase was asinine, and I am curious to see what will happen.

Capitol One is now blocking all coinbase transactions, and Chase is now running them as cash advances, so the credit card companies are aware. I think there may be a large amount of CC defaults due to cryptocurrency "investors" realizing they are in over their heads in the coming months.

[ Parent | on HN ]

Re:Robinhood Crypto – Invest in Bitcoin and other cryptocurr... by dahdum on Thursday January 25, 2018 @03:07PM (#16234115)

Their FAQ states that margin isn't allowed for crypto, or suitable as collateral

[ Parent | on HN ]