Crypto trading will initially include only bitcoin and ethereum, with more coins offered later. Beginning in February, residents in five states will be the first to be able buy and sell -- California, Massachusetts, Missouri, Montana and New Hampshire -- with other states following in waves until trading is available nationwide.
Starting Thursday, all users can track market data for 16 coins (including litecoin and ripple), read crypto news, and create price alerts on Robinhood.
"It is fairly obvious that people care about [cryptocurrency]," says Baiju Bhatt, co-founder and co-CEO of Robinhood. "We want to be there and help shape the way the industry goes with a better platform at a better price."
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Cryptos can be even riskier than other investments because of extreme volatility and security risks associated with an asset in its relative infancy. But that hasn't stopped a wave of investors looking to jump in.
Bitcoin has been the word on everyone's lips for the past few months, as the cryptocurrency has hit record highs. It has more than doubled since October and is now trading around $11,000, though down from its high just shy of $20,000 in December.
Bitcoin is not new to Bhatt and Robinhood co-founder and co-CEO Vlad Tenev, though. They have been looking at bitcoin and cryptos for a long time, even as far back as 2010 when they were doing their own crypto mining on personal computers.
"The thing we're seeing now, over the past year is that crypto and bitcoin are showing resiliency," says Bhatt. "So many times people have been quick to count it out. It has gone up and gone down. Now that resiliency is something that has some real staying power."
There's growing demand -- particularly among young people -- to get in on the action.
A recent study showed that if given $5,000, 12% of Millennials would put the money into cryptocurrency over any other type of investment, according to Swell Investing. That's compared with just 3% of those aged 45-54 and 55-64. Men were more interested than women in putting their money in crypto, with 14% of Millennial men saying they would opt for that over any other investment, compared with 9% of women.
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For a company that has pegged itself as democratizing capitalism and making high-end financial products available to everyone, offering crypto is a natural fit with Robinhood's mission, Bhatt says.
"Crypto-currencies have the potential to change how money around the world works from the ground up," he says. "It is a shift from institutions back to the people and we want to be central in creating that change."
Currently, most people buy cryptocurrencies like bitcoin and ethereum at digital exchanges like Coinbase.
Robinhood will offer easy access to funds, says Bhatt. It will make bank transfers up to $1,000 instantly available to trade crypto-currencies. Any additional funds transferred will land in your account via the normal ACH transfer system.
"The products out there now for trading crypto feel a lot more like Friendster," says Bhatt, referencing an early social network before Facebook. "It isn't clear which are going to emerge as the best and the way people invest in crypto today will not be the way they do in the future, but we aim to be a part of the future."