Robinhood's Bitcoin Trading Spreads Cause Investor Anxiety

Robinhood's default cryptocurrency order routing for buying and selling Bitcoin (BTC) incurs costs of approximately 2%, according to the company's own disclosures. The cost is not charged as a separate fee but embedded within the price.

Delphi Digital co-founder Tommy Shaughnessy revealed this week, sharing a screenshot showing a $1,426.03 spread for Bitcoin and requesting an explanation from Robinhood's CEO.

A spread represents the difference between the buy and sell prices of an asset, which is how Robinhood generates revenue. The default market maker routing sends cryptocurrency orders to external trading firms rather than exchanges, earning Robinhood Crypto $0.95 per $100 traded through this path.

The cost is included in the quoted price: buyers pay a higher price and sellers receive a lower one. Repeated buying and selling before market movements results in approximately 2% in costs.

Shaughnessy's agent cited buy and sell quotes of $75,361.72 and $76,787.76 on Thursday, a difference of 1.87%, which he labeled 'criminal' for such an asset.

Ronhood also offers a second option: Smart Exchange Routing, with transparent fees ranging from 0% to 0.95%, decreasing as traders' 30-day volume increases. Johann Kerbrat, Robinhood Crypto's VP of Business Development, clarified that users do not need to sell crypto to withdraw it and refuted claims about mandatory sales.

Robinhood has also blocked agents from moving, staking, or lending cryptocurrency. This month, two engineers were charged with insider trading related to Hyperliquid.

Earlier this year, Robinhood opened agent trading for cryptocurrencies, allowing external AI agents to trade through segregated accounts. However, the exact cost users pay for this convenience remains undetermined.