Trading Bitcoin on Robinhood? Why 2% Spread Has Traders Worried
Robinhood’s default route for crypto orders prices near 2% to purchase after which promote Bitcoin (BTC). The firm’s personal disclosures present the cost sits inside the value somewhat than arriving as a price.
Delphi Digital co-founder Tommy Shaughnessy surfaced the determine this week. He posted a screenshot displaying a Bitcoin unfold of $1,426.03, then requested Robinhood’s chief government to elucidate it.
Where the two% Cost Comes From
The unfold is the hole between the value to purchase an asset and the value to promote it. That hole is the place Robinhood will get paid.
The default setting, referred to as market maker routing, sends crypto orders to an out of doors buying and selling agency as an alternative of an change. Robinhood Crypto receives $0.95 for each $100 of quantity routed that approach.
That fee sits contained in the quoted costs. Buyers pay the upper quantity and sellers obtain the decrease one. A spherical journey subsequently prices near 2% earlier than the market strikes.
What the Screenshot Showed
Shaughnessy’s agent quoted a bid of $75,361.72 towards an ask of $76,787.76 on Thursday. That hole got here to 1.87%, which he referred to as prison for an asset this measurement.
“for anybody doing agentic crypto trades on Robinhood from the bounce you’re utilizing the default market making strategy so you’re going to successfully pay 1% to purchase and 1% to promote…,” wrote Shaughnessy.
Robinhood Says a Cheaper Route Exists
Johann Kerbrat, senior vp and basic supervisor of crypto at Robinhood pointed to a second possibility, Smart Exchange Routing, which fees a disclosed price starting from 0% to 0.95%.
That price drops as a dealer’s 30-day quantity climbs. Kerbrat additionally rejected a separate declare that clients should promote their cash earlier than shifting them off the platform.
“withdrawals to an exterior pockets don’t require promoting first. You can switch BTC (or any supported crypto asset) immediately out of your Robinhood Crypto account,” wrote Kerbrat.
Robinhood additionally bars agents from transferring, staking, or lending crypto. Two firm engineers had been charged in an insider buying and selling case tied to Hyperliquid this month.
Robinhood opened agentic buying and selling to crypto earlier this yr, letting outdoors AI brokers commerce by a separate account. How a lot merchants pays for that comfort stays unsettled.
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