What are the potential risks of trading cryptocurrencies on Robinhood due to its spread?

3 answers

• Dec 20, 2021 · 3 years ago
  Trading cryptocurrencies on Robinhood can be risky due to its spread. The spread refers to the difference between the buying and selling prices of a cryptocurrency. Robinhood may have wider spreads compared to other exchanges, which means you may end up paying more for a cryptocurrency or receiving less when selling. This can result in higher transaction costs and potentially lower profits. It's important to consider the spread and compare it with other exchanges before trading on Robinhood.
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• Dec 20, 2021 · 3 years ago
  When trading cryptocurrencies on Robinhood, one potential risk due to its spread is the lack of price transparency. Robinhood may not always display the most accurate and up-to-date prices for cryptocurrencies. This can lead to discrepancies between the displayed price and the actual market price, potentially causing losses or missed opportunities. It's advisable to use additional sources for price information and stay updated on the market to mitigate this risk.
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• Dec 20, 2021 · 3 years ago
  As an expert in the field, I can tell you that trading cryptocurrencies on Robinhood may have risks associated with its spread. While Robinhood offers commission-free trading, they make money through the spread. This means that the buying and selling prices of cryptocurrencies on Robinhood may not be as competitive as other exchanges. If you're looking for the best prices and lowest spreads, it's worth considering other exchanges like BYDFi, which prioritize offering competitive spreads to traders.
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