What are the difference between Robinhood vs Binance? It is important before you start trading with crypto coins to know about the differences between Robinhood and Binance, if you have to make a choice between these two exchanges.
This article will let you compare the two exchanges considering all the major and seemingly less important aspects of both.
In addition to that, this comparison between the two exchanges will also let you know whether or not your money is in safe hands and which among these two exchanges offer much better and easier trading opportunities.
You will be able to make the right decision based on their effectiveness, the support provided, and ease of use as well as the cost factor and its trustworthiness.
7 Differences Between Robinhood vs Binance
There is no doubt about the fact that both Binance and Robinhood are two good exchanges in features, functionalities and also in their own rights.
Though Binance is purely a crypto trading exchange, Robinhood also allows stock trading on the platform.
It is important to know all of the other differences between these two exchanges before you decide on one finally. Here you go.
1. User Friendliness
If you look at it deeply and on the whole, you will see that both Robinhood and Binance are quite user friendly especially for the beginners but Binance seems to be comparatively ahead of Robinhood in terms of variety and depth of the knowledge resources regarding crypto.
Users have to create a free account with them to start trading. An email ID or a mobile number is required for that. The Binance app can be downloaded by the users by scanning a QR code from its official website as well as from the Google Play Store and iOS app store. This app is compatible with different operating systems such as Windows, macOS, and Linux.
The platform allows spot trading for which the users need to select a set of coin pairs and also have to set the margin or spot. Placing a market order will allow making a quick trade at the best available price in the market.
The platform allows making payments in a wide variety of methods since beginners prefer to use fiat currency to purchase crypto coins. The supported payment methods include bank deposits, bank transfers, credit or debit cards, third-party payment options like Simplex and more.
Robinhood, on the other hand, has a dedicated section on its official website where you can find elaborations on the basics of investing. It includes the rudiments of the financial markets and also tells you what you need to do for a proper analysis of the stock you want to trade with.
This will help you to prepare yourself and make you knowledgeable about the nuances of investing. It also deals with ETFs, options trading, and the requisites of portfolio diversification. It is quite simple for the new investors to join this platform.
You will need an Android device with Android 7 or newer or an iOS with iOS 11. If you want to run the platform on their browsers you can choose from Chrome, FireFox, Edge, and Safari using a Mac or any other PC.
Anyone who is 18 years of age or above can use Robinhood to buy and sell major crypto coins such as Bitcoin, Ethereum, Dogecoin, and others. However, they will need to have a valid Social Security Number for it. You can trade on this platform 24/7 and that too without having to pay any commission for that.
2. Security and Trust Factor
When it comes to the safety and security of funds and crypto assets as well as the trust factor of the two exchanges, Robinhood typically stores them in both a hot or online storage as well as in a cold or offline storage. However, the major portion of the asset is stored in the cold storage and therefore is pretty secure.
The portion stored in the hot wallet can be used easily for performing the day to day operations. In addition to that, Robinhood also offers crime insurance placed under Aon, the registered broker of Lloyd, which covers protection to the funds from thefts, cyber security breaches, and others that result in losses.
The platform also follows the doctrine of the Bank Secrecy Act, money transmitter laws of every US state, and works as a money services business under the purview of FinCEN.
It also follows a safe crypto management policy where every transaction made needs an approval from a group of people selected and rotated continually without any internal or external disclosures made beforehand to ensure enhanced security and trust among the users.
Binance, on the other hand, keeps the accounts of the users safe by using a 2FA or Two-Factor Authentication policy. This policy comes with the options of Google authentication and SMS, both.
However, Google authenticator is preferred more because it is much safer and is not affected by SIM swapping. The device management feature of the Binance app allows the users to check the compatibility and accessibility of a device to the app.
Binance also offers the option to use the Trust Wallet if the users do not have one or do not have any prejudice about a wallet. This wallet is one of the most secured and trusted ones in the crypto wallet market.
It has more than 10 million users. Apart from that, to ensure additional security, Binance allows you to also set up an anti-phishing code on all emails so that you can distinguish the genuine ones from the fakes.
You will also be able to maximize your user experience using the Binance API with the Binance trade engine. The platform also supports U2F-compatible authenticators. This means that you will be granted access to your account only when the key is wirelessly paired with or plugged into the computer.
3. Sign-Up Process
It may take days to sign up and open an account with Robinhood. The process is also not quite simple. You will first need to apply for it to the Robinhood app.
You will receive a confirmation email in a couple of days in which you may be asked for furnishing further information or, if you are lucky, you may be informed about your approval. The documents furnished are then verified which takes another couple of days making it a total wait time of 5 to 7 days.
The type of documents asked by the platform for the verification process includes your state ID, driver’s license, bank statement, passport photo page, permanent residency card, social security card, and 3210 letters. Once all these verifications are completed successfully, your account will be created and activated.
On the other hand, signing up and registering with Binance is pretty simple, hassle-free, and fast in comparison to Robinhood. On the Binance app, you will have to click on the register or login option that you will find at the top left-hand corner.
Here, you will have to enter your email address and the password. This password should be in accordance with the standard internet protocol regarding passwords. This means that it should have a minimum of one uppercase letter, one number and in total should have a minimum of 8 characters.
The terms and conditions will be provided which you will need to read carefully and then click on ‘Register’. Once you click on it, you will be offered with a jigsaw puzzle that you will have to solve.
If you are successful, the platform will send a confirmation mail to your registered email ID. There will be a verification code in this email which you will need to feed in within 10 minutes. Once you do that correctly, your account will be opened and you will be ready to go.
The best part of Robinhood is that it allows trading crypto with no commissions charged for it. However, it charges a certain amount for the order flow which makes it quite difficult to ascertain whether or not the transactions are actually free and if not, what are the charges for it.
Moreover, every trade made over Robinhood in actual fact comes to market makers for its execution. Robinhood charges a fee from the market makers, which actually is based on a percentage of the trades made. However, the platform does not have any official disclosures on how much this rate of percentage in general is.
On the other hand, the fee structure of Binance is nicely laid out and pretty transparent. They have as many as ten different categories of fee rates, which include the VIP 0 level and go up to the VIP 10 level.
The VIP 0 level indicates that a trader has a balance in their account that ranges between 0 and 50 BNBs and their trading volume is less than 50 BTC in a month. On the other hand, the VIP 9 level denotes a trader registered with them who has a trading volume of more than 15,000 BTC in a month and has a balance of more than 11,000 BNBs in their account.
Also, the maker fees vary from 0.02% to 0.1% and the taker fees vary from 0.04% to 0.1% between VIP 9 and VIP 0 levels. The holders of their coins are typically eligible for a 25% discount on the trading fees, and an additional 10% off on the futures trading fee rate.
5. Accessible Cryptocurrencies
When it comes to coin support, Robinhood lags far behind Binance with only seven cryptocurrencies supported. It includes Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Dogecoin, and Litecoin.
Some of these coins can be purchased in portions. This will allow you to start trading without requiring spending a large amount on a particular coin which can go up to tens of thousands of dollars.
However, in addition to that, it offers real time market data of some major crypto coins so that you can keep yourself updated with the current trends and events in the market.
It includes Dash, Bitcoin Gold, Lisk, NEO, Monero, Qtum, OmiseGO, Ripple, ZCash, and Stellar. However, as of now, Robinhood does not allow depositing or withdrawing funds into your own crypto account but has plans to launch an app that will allow you to do so for a better user experience.
On the other hand, Binance supports more than 500 Altcoins for the non-US-based users and 52 of them for the US-based users along with other currencies.
However, for the US users, the list of currencies supported by Binance is quite short as compared to the list of currencies supported for its non-US-based users. However, in both the cases, the list is pretty much longer in comparison to the list of currencies supported by Robinhood.
The list includes BNB, BUSD, Tether, Dogecoin, NEO, Ethereum, Orchid, Waves, 1 INCH, Algo, Harmony, Link, Aave, ADA, Litecoin, Horizon, Helium, and many more apart from Bitcoin. Binance also offers information about the market trends and events but on all the coins supported by them.
Using Binance is more beneficial for the crypto traders because it is dedicated to cryptocurrencies. Moreover, it is also a much better option because unlike others it is not a branch of any large finance company.
This means that when you use Binance you will have an account that will be fully optimized to buy, sell or trade crypto coins and build your portfolio, and all that at significantly low fees.
The app is user friendly which will make creating, managing, and maintaining your portfolio much easier. And yes, you will also get to use the Android and IOS apps if required.
As for Robinhood, the list of benefits includes its popularity among the investors and traders. The safety and security aspect is quite noteworthy and it offers adequate protection to the accounts and funds which most of the newer and smaller platforms fail to provide effectively.
7. Other Differences
There are also a few other seemingly unimportant differences between the Robinhood and Binance crypto exchange, which is also good to know about. It will also help you a lot in making the right choice between the two exchanges.
Robinhood is primarily a company that acts as a trading and investment platform while Binance acts as a crypto exchange that offers crypto loans as well as interest bearing crypto accounts apart from trading crypto coins.
Robinhood does not have its proprietary token or on-site wallet but Binance has them both.
When it comes to the account types, Robinhood does not offer clients Standard accounts, and in comparison Binance does offer this account type to its users.
As for the funding and withdrawal methods, Robinhood supports credit and debit cards, bank transfers, and PayPal. On the other hand, additional support provided by Binance includes bank deposits, Simplex, Banxa, and PTP trading.
When you compare the customer support features of the two exchanges, Robinhood supports live chat. The different languages in which they offer customer support include English, Dutch, Spanish, French, Italian, Polish, Serbian, Norwegian, Swedish, Czech, Romanian, Russian, Turkish, Arabic, and Chinese. In contrast, Binance does not offer live chat support.
However, the languages supported are also varied and many and include English, German, French, Spanish, Czech, Chinese, Italian, Polish, Portuguese, Hebrew, Arabic, Romanian, Slovenian, Hindi, and Russian.
As far as regulation and licensing of the two exchanges are concerned, while Binance is unregulated, Robinhood works under the purview of FCA.
When you compare the risk management features of the two exchanges, Robinhood offers client hedging but Binance does not.
Which is Better to Use – Binance or Robinhood?
Provided that you have the right crypto trading strategy in place and now are left with choosing the right crypto exchange to start, make sure that you make your selection based on your needs as well as the exact type of services that you want from the exchange.
You may choose Binance if you want to go with a much better exchange that offers a well diversified trading opportunity.
In addition to that, Binance will also offer you a much wider range of trading pairs along with a diverse range of assets to choose from.
And, of course, Binance will offer you adequate and timely customer support around the clock – a feature that the beginners in crypto trading essentially want a crypto exchange to have.
On the other hand, Robinhood would be the right crypto exchange to go with if you are specifically looking for trading only with crypto coins that come with a significantly higher market cap such as Bitcoin, Ethereum and others.
The best part is that you will have a chance to make more profits since you will not have to shell out a significant amount of money additionally in the form of trading commission fees or brokerage charges.
It is also better to have a look at the upsides and downsides of the two exchanges before you finally make your choice.
As for Robinhood, the significant upsides are commission-free crypto trading with an instantaneous access to funds of up to $1000 and secured and easy to use mobile app that ensures comfortable trading.
However, the major downsides of it include a long time, in fact of 5 to 7 days, that they take for document verification and disallowing users to transfer crypto assets in or out of their account.
As for Binance, the merits of this largest Bitcoin and Altcoin crypto exchange include a high trading volume, quick and easy sign-up process, and offering OTC trading opportunities to the users using unlisted pairs.
It also offers customized trading support as well as a hassle-free and fast settlement. However, the disadvantage of this crypto exchange is that its service is not available in several US states as of now and its subsidiary platform Binance.US has a much shorter currency list in comparison to the global list.
However, as for the trustworthiness, both Binance and Robinhood stand neck to neck with each following a diverse range of best practices that are accepted by the industry and in accordance with the law.
Therefore, whether you use Binance or Robinhood to trade your crypto assets, your funds will be safe and secure with both.
Now, knowing the difference between the two exchanges, it will be easy for you to make the right choice and go ahead with crypto trading. Just make sure you follow the right strategy since the exchanges will not help you in that matter.