We’re here to help you understand the basics of cryptocurrency trading.
Cryptocurrencies are digital currencies, created and stored electronically in the blockchain using cryptography (hence “crypto”) to control their creation and to verify the transfer of funds. Cryptocurrencies are unique because they don’t have any physical form and exist only in the network. Their supply, or circulation, isn’t determined by any central bank or government, and the network itself is completely decentralized. There are a growing number of cryptocurrencies, but the most popular to date are Bitcoin, Ethereum, and Litecoin.
A blockchain is a digital, decentralized ledger of cryptocurrency transactions. The Bitcoin and Ethereum networks are both blockchains where all transactions are recorded. Where assets tied to governments were formerly backed by gold or silver, Bitcoin and Ethereum are backed by their respective networks. A typical cryptocurrency transfer is first published to the blockchain, where it’s then securely verified by multiple sources in the network. Once a transfer is confirmed by several sources and verified for all to see, it’s accepted by the network. Since the blockchain verifies the transfer of assets, you no longer need to go through a bank to initiate a transaction.
Bitcoin, created in 2009, is the first decentralized cryptocurrency. Like many cryptocurrencies, it’s not tied to any government or issuing authority, and there’s no middleman involved when it’s used to purchase goods. Most of its concepts have been applied to other fields, and replicated in other cryptocurrencies. Bitcoin denotes both the name of the network and the currency that’s built on top of it. Its symbol is BTC. Bitcoins are a tradable asset on Robinhood. You can buy and sell fractions of BTC. The minimum order size is 0.00001 BTC. Keep in Mind: Bitcoin is not a stock and your cryptocurrency investments are not protected by SIPC.
Bitcoin Cash, launched in 2017, was created as an offshoot of Bitcoin that allows faster transactions on the network. Similar to Bitcoin, Bitcoin Cash is capped at 21 million coins. Its symbol is BCH. Bitcoin Cash is tradable on Robinhood, and you can buy and sell fractions of BCH. The minimum order size is 0.00001 BCH, and the smallest amount you can buy or sell is 0.00000001 BCH. Bitcoin Cash is not a stock and your cryptocurrency investments are not protected by SIPC.
Dogecoin, introduced in 2013, is known for its playful take on the cryptocurrency phenomenon. It’s typically used in online communities to “tip” users for content that’s particularly witty or useful. It’s also become a popular cryptocurrency for donating to charities. Dogecoin’s symbol is DOGE. Dogecoin is tradable on Robinhood. The minimum order size is 10 DOGE. We don’t offer fractional Dogecoins.
Like Bitcoin, Ethereum is a digital currency based on a blockchain technology. Though the applications of Ethereum extend beyond currency, the coin, technically called an Ether, is a tradable asset on Robinhood. Its symbol is ETH. You can buy and sell fractions of ETH. The minimum order size is 0.001 ETH, and the smallest allowable quantity increment is 0.000001 ETH. For example, you can place an order for 0.001001 ETH, but not 0.000999 ETH. Keep in Mind: Ethereum is not a stock and your cryptocurrency investments are not protected by SIPC.
Ethereum Classic is the original Ethereum blockchain. On July 20th, 2016, Ethereum executed a “hard fork,” which means that the single Ethereum blockchain split into two distinct blockchains. As a result of this split, what was once simply referred to as Ethereum became Ethereum Classic, and the newly created blockchain is now referred to as Ethereum. All transactions on both blockchains are identical up until the hard fork at block 1920000. Starting at the split, the two cryptocurrencies began living on separate blockchains.. Ethereum Classic is tradable on Robinhood, and you can buy and sell fractions of ETC. The minimum order size is 0.001 ETC.
Litecoin was launched in 2011 as an alternative cryptocurrency to Bitcoin. Like Bitcoin, it’s based on blockchain technology. Litecoin has quickly become one of the most popular cryptocurrencies because of its fast transfer confirmation times when compared to Bitcoin. Its symbol is LTC. Litecoin is tradable on Robinhood, and you can buy and sell fractions of LTC. The minimum order size is 0.001 LTC, and the smallest amount you can buy or sell is 0.00000001 LTC. Litecoin is not a stock and your cryptocurrency investments are not protected by SIPC.
The prices of cryptocurrencies are volatile largely because they’re a new asset class, and there’s no consensus on their overall worth as a currency or investment.
Robinhood Crypto supports market and limit orders for cryptocurrencies, and they work similarly to orders for stocks and options. When you place a market order, we display the best available price on Robinhood Crypto, which is based on the exchanges we connect to. You’ll never get charged a commission or additional trading fee on top of the execution price. For limit orders, you specify the maximum (or minimum) price you’re willing to buy (or sell) at. Cryptocurrency prices are volatile. To help protect your market orders against dramatic price moves, we adjust market orders to limit orders collared up to 1% for buys, and 5% for sells. Any price difference you see between the estimated price and the execution price is due to market movement and isn’t something that Robinhood profits from.