The popularity of Cryptocurrencies and crypto markets is growing. More and more people want to participate in these markets. We shall look into Binance and Robinhood. We shall compare the two platforms and their features.
Binance vs Robinhood: At a Glance
Robinhood started in 2015 and was highly popular for its zero-commission fee on stock trading. They allowed easy access to markets for the average Joe by allowing fractional shares trading and cryptocurrencies trading.
On the other hand, Binance is a global cryptocurrency trading platform. In the U.S., Binance is known as Binance US. Binance’s unique selling point is its extensive portfolio of cryptocurrencies. In addition, Binance is the leading cryptocurrency trading platform in the world.
Both Binance and Robinhood are quality platforms, and each has its they are also very similar, especially because you can trade crypto on both platforms. So, while deciding which platform is better, it is advisable to go with your unique needs.
If you need a crypto trading platform with just the common crypto and is very regulatory compliant and insured, then Robinhood is your platform. But if you are looking for a platform with a vast portfolio of crypto, then Binance is your platform.
Binance does stand taller than Robinhood, specifically when it comes to the crypto market, because it is fully dedicated to crypto trading, contrary to Robinhood, where you can also trade stocks and ETFs.
But before you make your decision as to which platform works for your needs, we must dive deeper into these two platforms to understand what they both offer and their nuanced differences. Let’s compare them independently below.
Robinhood gets its name from its mission of providing everybody with access to the financial markets and not just the wealthy. The app was launched in 2015, and so far, they have 31 million users, the majority of them being millennials. Moreover, the average age of a Robinhood user is 26 years old.
They are also known for being the first to introduce zero commission trading. Their founder has a background in building trading platforms on Wall Street and understood that it only took a few cents to execute a trade, but brokerages were charging between 5 and 10 dollars. So they forewent the charge and preferred to make their money by earning interest from customers’ bank balances, margin lending, and selling order information to high-frequency traders.
The U.S. Securities and Exchange Commission (SEC) launched an investigation into their conduct concerning giving misleading information to customers. According to SEC, Robinhood delivered poorer trading prices that cost clients a total of $34.1 million, even after taking into account the commission-free discounts. The company made these statements during a time when it was experiencing rapid growth.
These are the factors that make Robinhood stand out.
Zero Commission Rates
The main selling point for Robinhood is zero commission on its trades of stocks, cryptocurrencies, ETFs, and options. Although other brokerages might have followed Robinhood’s strategy of zero commissions, Robinhood still has one on them as they do not have a per-contract charge. In addition, its fee structure is very competitive.
Robinhood allows you to own fractional shares. So, for instance, if the stock were going for $100, if you were to invest in the stock, you would need a minimum of $100, but with Robinhood, you can invest as little as a dollar in stock and own a fraction of that particular stock.
This allows people with no robust capital to invest in the stocks of their choice and diversify their portfolios as much as they need.
Limit Order on Crypto
While buying and holding crypto is common for crypto investors, other traders want to take advantage of the market’s volatility. A limit order enables you to set entry and exit points on different cryptocurrencies. Once your target price is achieved, the order is executed, and you take profits.
Robinhood Gold is premium. While the app is popular for zero commission on trades, the Gold version of the platform is $5 per month. In addition, with the premium version, you get access to margin trading, larger deposits, and Morningstar stock research reports.
Below are the things that Robinhood is not thriving at.
A limited number of crypto
Robinhood’s crypto portfolio is underwhelming. Keeping in mind that cryptocurrencies span decentralized finance, entertainment, supply chain, and healthcare, their focus on majorly payment currencies does not impress.
Robinhood has only seven cryptocurrencies in its portfolio. One can’t help but notice that even some major cryptocurrencies are missing.
Minimal Tools and Research Capabilities
Robinhood was built to be simple for the average Joe. The lack of sophistication deprives the platform of strong analytic tools and research. If you want to do advanced trading, do stock research or access educational tools, you might have to look elsewhere.
Binance is the world’s largest crypto exchange platform in terms of trading volume. It boasts of having the largest crypto portfolio and operating in over 100 countries around the globe. Although it is banned in some countries like the U.K., the platform continues to do well in other countries.
Due to regulatory demands, Binance was forced to register a different platform in the US Binance US. As a result, Binance US has a considerably limited portfolio compared to global Binance, but it adheres to the regulation of the United States. That notwithstanding, the SEC has disclosed that they are under investigation.
In addition to having a robust portfolio, they also offer lower fees and provide advanced features that cater to the experienced investor.
These are some of the things that Binance does well.
Although Robinhood is a zero commission trading platform, Binance charges. Their highest fee is 0.1%. If you use their coin BNB to trade, you get 25% off your trading charges.
Large Crypto Selection
Binance offers over 350 cryptocurrencies to trade, but the number might vary depending on your geographical location. Their currency portfolio includes stablecoins, altcoins, Bitcoin, and decentralized (DeFi) finance tokens.
Advanced Trading Tools
Through Binance, an investor can buy or sell crypto by setting a limit order. For beginners, they have the convert function, and for the pros, there are many trading charts and other charting tools to assist them in their investment. They also allow trading using leverage and enable investors to speculate on the price of Bitcoin through their Bitcoin futures.
Things Binance can do better moving forward.
Binance’s regulatory challenges arise from its extensive portfolio and the fact that they operate in many countries. Although it might be challenging to satisfy all the regulatory bodies globally and maintain its competitive edge, Binance is working hard to ensure compliance.
That being said, Binance has had a rough regulatory patch in the U.K., Japan, Singapore, Canada, and Thailand. In the U.S., they are under investigation for tax evasion, money laundering, and insider trading, though no charges have been filed yet.
Complicated for Beginners
Binance understands that they are complicated for the beginner, so they have a simpler interface for beginners. They also offer a wealth of educational material that one can use to educate themselves.
Nevertheless, the main Binance trading interface is very complex for a beginner. In addition, the depth of information presented in the interface can be confusing.
Now, let’s compare the features.
Here is how different features in both trading platforms measure against each other.
Robinhood is a zero commission trading platform. It is also free to deposit money to Robinhood via bank transfer. But it is worth noting that Robinhood does not accept credit card or debit card deposits.
On the other hand, Binance charges a maximum of 0.1% on spot trading. Debit and credit card fees vary depending on the country and payment method. Depositing money via bank transfer is also free with Binance.
In terms of fees, Binance wins because they offer a low charge on trades. Since Robinhood offers Zero commission, someone has to pay the piper. Their model of selling order information might work against the investor’s interests like in the GameStop saga and end up costing more than anticipated.
Robinhood only offers seven cryptocurrencies on its platforms, whereas Binance offers over 350 currencies. All the Top 10 currencies by market cap are found on Binance.
Binance US, on the other hand, offers over 70 cryptocurrencies, including the top 10.
Binance tramps Robinhood in the number of cryptos on a platform.
Binance does not have its wallet, but it partners with Trust Wallet, offering noncustodial wallet options. Trust is a reliable hot wallet connected to the internet.
On the contrary, Robinhood launched its wallet earlier this year. Initially, it only offered custodial options, but now Robinhood customers can transfer and transact their crypto assets via Robinhood’s wallet.
Although Trust wallet works well with Binance, Robinhood wins for having its wallet. This eliminates any friction that might arise while dealing with two different institutions while transferring your crypto assets, as it happens with Binance.
Both Robinhood and Binance do store their assists in cold storage. In addition, Robinhood has a third-party insurance policy to protect its assets against hacking. Also, Robinhood engages external security experts to strengthen the security of the assets in its portfolio.
Binance, apart from using cold storage, also uses its Secure Asset Fund to keep a part of the trading fees.
Robinhood seems to be more secure even with the addition of third-party insurance.
While Robinhood is regulated by the SEC and has New York’s BitLicense, it is more secure for U.S. citizens. On the contrary, Binance’s regulatory background has not been the best and is under investigation despite denying any wrongdoing.
Once again, Robinhood takes this one because, especially in the U.S., it is more regulatory compliant than Binance.
Overall, considering crypto trading, Binance does tower over Robinhood. Binance is purely dedicated to crypto trading, and hence it offers even advanced options for more experienced crypto investors.
Its charts, tools, research capability, and wealth of educational material make Binance the preferred crypto trading platform.
Which Is Best for Beginners
Robinhood might appeal to beginners as it has few options, a simple user interface, and the information presented is not overwhelming.
Which is best for Experienced Traders
Binance is the home of experienced traders because of the platform’s wealth of information and tools.
How to Sign Up for Robinhood
- Through your Robinhood app, send an application.
- You’ll receive a confirmation email or an email asking for more information after a few days.
- After application, wait five to seven days for your account to be open.
- You might be asked to submit the given documents.
How to Sign Up for Binance
- On Binance.com, click ‘register’
- Enter email address
- Create password
- Enter referral I.D.
- Agree to Terms of Service
- Click ‘Create an account.’
- Complete security verification
- Within 30 minutes, enter the verification code sent to your email
- You can enhance account security on the dashboard.