Why Are Robinhood Crypto Prices Different?

If you’re wondering why the prices for cryptocurrencies on Robinhood are different than other exchanges, there are a few factors to consider. In this blog post, we’ll explore some of the reasons behind the price differences and what you can do to get the best price for your crypto.

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Introduction

Cryptocurrencies on Robinhood are only traded in decimals. For simplicity, we only show two decimal places for cryptocurrency prices on Robinhood. Price disparities may also exist between different exchanges that offer cryptocurrency trading. The liquidity of a cryptocurrency is also a factor—the more liquid a crypto is, the closer the bid and ask prices will be.

What factors influence cryptocurrency prices?

Cryptocurrency prices are influenced by a variety of factors, including media coverage, exchange rate movements, and government regulation. Here, we’ll explore some of the most important factors that influence cryptocurrency prices.

Cryptocurrency media coverage

One of the most important factors influencing cryptocurrency prices is media coverage. When Bitcoin and other cryptocurrencies first burst onto the scene, they received a lot of media attention, which caused their prices to skyrocket. Today, cryptocurrencies still receive a lot of media attention, though not as much as they did in the early days. This is because the novelty has worn off and people are now more familiar with how cryptocurrencies work. Nevertheless, media coverage is still a very important factor influencing cryptocurrency prices.

Exchange rate movements

Another important factor influencing cryptocurrency prices is exchange rate movements. When the US dollar starts to strengthen against other currencies, for example, investors will often start buying up Bitcoin and other cryptocurrencies as a way to hedge their portfolios. This can cause cryptocurrency prices to rise. Similarly, when the US dollar weakens against other currencies, investors will often sell off their Bitcoin and other cryptocurrencies, causing prices to drop.

Government regulation

Government regulation is another important factor influencing cryptocurrency prices. In some countries, such as China and South Korea, government regulations have been very strict, causing investors to sell off their Bitcoin and other cryptocurrencies in fear of losing them entirely. In other countries, such as Japan and the United States, government regulations have been more lax, giving investors more confidence in cryptocurrencies and causing prices to rise.

How do cryptocurrency exchanges work?

It all has to do with how cryptocurrency exchanges work. When you buy or sell a cryptocurrency on Robinhood, we execute the trade on your behalf. In order to do this, we need to send your order to one of the many cryptocurrency exchanges that we partner with. The prices you see on our platform are the prices these exchanges are willing to buy or sell the crypto asset for at that very moment.

How do Robinhood Crypto prices differ from other exchanges?

Robinhood Crypto prices differ from other exchanges for a few reasons. First, we don’t have to charge you commission on crypto trades like other exchanges do. Second, the Robinhood platform is designed with mobile first users in mind. This means that our order books are kept lean to provide you with the best possible prices.

Why do Robinhood Crypto prices sometimes differ from the spot price?

The spot price of a cryptocurrency is the current market price. The Robinhood Crypto spot price is the midpoint of the bid and ask prices listed on our order book, which is supplied by a number of exchanges. Because our set up is different from most exchanges, your Robinhood Crypto prices may differ from the spot price you see on other platforms.

Here are some reasons why:
-Our multiple exchanges setup. We route orders to different exchanges in order to get you the best fill possible. You may see multiple fills for a single order, coming from different exchanges, which will cause your spot price to average out over time.
-Different books. Each exchange has its own individual order book with different bid and ask prices. The order book is constantly changing as people buy and sell cryptocurrencies.
-Different prices for same coins. Although two exchanges may have the same name for a given cryptocurrency, they may not be exactly the same. For example, Bitcoin Cash ABC (BCHABC) and Bitcoin Cash SV (BCHSV) are two different cryptocurrencies that were created during the Bitcoin Cash hard fork in November 2018.

How does Robinhood Crypto determine its prices?

Prices for cryptocurrencies on Robinhood Crypto are generally based on the trade volume of the currency in the global market over the last 24 hours. Due to the decentralized and global nature of cryptocurrency trading, prices can vary quite a bit from one exchange to another; however, Robinhood Crypto aims to provide its users with prices that are as close to real-time as possible.

The main exception to this rule is when there is low volume trading for a particular currency; in these cases, Robinhood Crypto may adjust its prices to match those of other exchanges where there is more activity. In addition, Robinhood Crypto may also temporarily suspend trading for a currency if there is not enough activity or interest in that market.

What other factors can influence Robinhood Crypto prices?

There are a few different reasons why the prices for Robinhood Crypto coins might be different than the prices you see on other exchanges. One reason is that Robinhood only allows customers to buy and sell cryptocurrency during market hours, from 9:30am to 4pm EST, while other exchanges never close. This can cause prices on Robinhood to be different than the prices you see on other exchanges, since the market is constantly moving.

Another reason is that Robinhood only allows customers to trade in whole coins, rather than fractions of a coin like bitcoin (BTC), ethereum (ETH), and litecoin (LTC). This can also cause prices on Robinhood to be different than the prices you see on other exchanges, since most exchanges list prices in fractions of a coin.

Lastly, Robinhood doesn’t currently offer crypto-to-fiat or fiat-to-crypto conversions. So, if you want to convert your USD into BTC on Robinhood, you would first have to buy ETH with your USD, and then use ETH to buy BTC. This can also cause prices on Robinhood to be different than the prices you see on other exchanges that offer fiat-to-crypto or crypto-to-fiat conversions.

What should I do if I think Robinhood Crypto prices are unfair?

If you think that the prices for Bitcoin, Ethereum, Litecoin, or any other cryptocurrency are unfair on Robinhood Crypto, there are a few things you can do.

First, you can check the order book to see the prices at which people are willing to buy or sell the cryptocurrency. You can also look at the price chart to see how the price has changed over time. If you think that the prices are still unfair, you can submit a help ticket to Robinhood Support.

Conclusion

There are three explanations for the different prices: 1) the exchanges on which trading takes place don’t have the same liquidity; 2) there may be different amounts of a particular cryptocurrency at each exchange; and 3) the prices are simply different. It’s also worth noting that, because Robinhood is a mobile-first platform, it may be more susceptible to wild swings in price due to the smaller number of people trading at any given time.

FAQ

Q: Why are Robinhood Crypto prices different than other exchanges?

A: The prices of cryptocurrencies on Robinhood Crypto are not the same as the prices on other exchanges. The prices on Robinhood Crypto are quoted in real time and we do our best to update the prices every minute. However, because the market is constantly changing, we may not always be able to update the prices in real time.

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