Which is Better? • Benzinga Crypto

Want to jump straight to the answer? SoFi is better for long-term investors looking to manage their finances in one place, and Robinhood is better for investors who want to manage their trades using advanced trading instruments.

Robinhood and SoFi are brokerage services that provide a vast range of financial instruments. Both companies offer investors ways to invest without the high management fees of traditional investments. 

Although these apps offer similar products and cater to beginner investors, they differ in critical areas. Robinhood excels as a self-contained investing app, andSoFi provides a combination of investing, loans, insurance and coaching to its clients.

SoFi’s platform allows users to trade stocks, exchange-traded funds (ETFs), and cryptocurrencies. Commission-free trading is available on all assets except crypto. Overall, SoFi acts as an online bank, providing financial products for borrowing, saving, spending, and investing. 

For inexperienced traders, SoFi’s robo-advisor offers automated trading. In addition, users can purchase fractional shares of stocks, which is excellent for those who want to get started with a small investment. Founded in 2011, SoFi began as a student loan refinancing company, added personal loans a couple of years later, and launched SoFi Invest in 2017.

A pioneer in the field of no-fee stock options trading, Robinhood’s goal is to provide clients with a free and straightforward investing experience. Due to its streamlined design and attention to the basics, 

Robinhood has gained a large following among young, tech-savvy investors. Robinhood excels in investing, offering clients a plethora of order types, including stop-limit, limit, and market orders. 

The company offers trading options for cryptocurrency, stocks and recently added cash management and recurring investment services to its platform. It also allows users to purchase fractional shares rather than stocks, allowing small investors access to some of the largest corporations in the world.

What is a Cryptocurrency Exchange?

A cryptocurrency exchange is a trading platform where users can buy and sell digital assets. In addition to trading cryptos for one another, clients can also purchase them using fiat currency. The user can also convert their cryptocurrency gains into cash and withdraw the funds into their bank accounts.

A cryptocurrency and stock exchange differ because stock exchanges offer shares of a company, while cryptocurrency exchanges offer digital currencies such as Bitcoin and Ethereum

Another critical difference is that when you purchase a stock, you become part-owner of the company. The purchase of a cryptocurrency token does not necessarily imply partial ownership of the company.

Important Cryptocurrency Exchange Features

There is no single cryptocurrency exchange that fits every individual user’s needs. It is vital to assess your interests and identify an exchange with features that align with your goals regarding crypto. Here are some of the essential features to look for:

Security

Unlike traditional investments, a central authority does not back cryptocurrencies, and your crypto holdings are not insured the same way as bank deposits. Many exchanges, including Coinbase and eToro, hold your U.S. dollars in FDIC-insured bank accounts. However, these risks are not covered under FDIC insurance for cryptocurrency holdings.

Certain exchanges have insurance policies to protect users’ digital assets within the exchange from hacking or fraud. If the reserves were an exchange hack, accounts with up to the insured amount in crypto would be protected. As an alternative, some companies rely only on their security practices to protect clients.

Supported coins

There are thousands of cryptocurrencies available, but not every exchange offers them all. A popular coin such as Bitcoin or Ethereum is likely to be available on any given exchange you consider. However, more research will be necessary for newer altcoins, coins with a minimal market cap or meme coins.

Trading features

For crypto traders, a significant factor in choosing an exchange is the type of trading options available through the platform. Some clients require access to more advanced features such as secure trading bots, charting tools, and real-time order books. At the same time, others may need to borrow money to trade cryptocurrency or futures contracts.