Robinhood's Plan to Win the Crypto Exchange War? Kill Trading Fees

Launched early this year, Robinhood Crypto is differentiating itself with zero-fee transactions, with the ultimate goal of doing away with the concept of trading fees in the market altogether.

The fee-free business model has already served Robinhood well in its flagship business, Robinhood Financial.

In crypto it's unclear how Robinhood intends to make money over the long term.

While Robinhood's no-fee model may make it an appealing alternative for many retail crypto investors, the competition is formidable, even in the very limited field of user-friendly onramps for consumers bewildered by most crypto exchanges.

Aside from costs Robinhood also touts its ability to do all one's trading - stocks, options, ETFs and now crypto - in one place, and its capacity to handle large order volumes, a notorious shortcoming in the crypto exchange space where multi-day outages are not unheard of.

Tenev said Robinhood is just getting started in crypto.

In a funding round last month, Robinhood raised $363 million to expand its cryptocurrency trading services beyond the states it currently services, in order to slowly but surely become "The largest or one of the largest crypto platforms out there," as the other co-CEO, Biaju Bhatt, put it in an interview with Fortune.

Robinhood Markets, the parent company to Robinhood Crypto, has other big ambitions as well; it has been reported to be in talks with regulators about advancing into the banking space.

In the long run, Tenev said that when no-fee trading becomes the norm, both in crypto and in traditional investing, Robinhood will "Have to figure out how to stay relevant and innovative as the market leader."

Of course, that's a bit of a humblebrag, considering that Robinhood is still a relatively new player, both to stock brokerage and especially crypto.