Robinhood is a free trading app valued at over $5 billion. While its co-founder says it is trying to “democratize America’s financial system” by offering free trades, the app has come under scrutiny in recent months.
Baiju Bhatt, Robinhood co-founder, stated in May 2018 that,
“The mission of Robinhood is to democratize America’s financial system.”
Free Trading App Robinhood Continues Growth
The vision for Robinhood and a free trading app came about after the Financial Crisis of 2008; and, after launching in 2013, by 2015 more than 700,000 users were on Robinhood’s waiting list. The app’s popularity is soaring, doubling its user base in 2018. Today, more than 6 million use the app which doesn’t charge its customers commission. While a headline-grabbing offer, the fintech superstar is running into a few difficulties.
Robinhood the Future of Investing via Free Trading App
While CNBC is quick to note the small average account size of Robinhood users, most are young. As is the case with cryptocurrencies, the vast majority of app users are millennials beginning their financial lives.
In a bid to increase its market share and steal even more business from online trading services, Robinhood offered 3% interest on its checking and savings account. The move was a disaster, and the firm had to backtrack. Technology’s impact on financial markets is continuing to evolve; and, being aware of these changes and how they may impact the markets, both from a positive or negative standpoint. Free investment apps such as Robinhood have the potential to greatly increase liquidity in the coming years, as millennials build their net worth and adoption rates continue to soar.