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Top 5 Robinhood Alternatives in 2021

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October 18, 2021
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    Robinhood's commission-free trades sparked a revolution in the finance industry. Between 2015 and 2021, its user base grew from 700,000 to around 20 million, making it one of the biggest brokerages in the country. The company added support for cryptocurrencies in 2018, supporting Bitcoin, Ethereum, Dogecoin, Litecoin, and other major coins.

    Despite its mission to democratize investing, Robinhood has come under fire for its payment-for-order-flow business model and trading suspensions. The company routes its users' trades to hedge funds and other large financial entities that leverage them for profit. As a result, many traders and investors have started to look elsewhere for a brokerage.

    In this article, let's take a look at some Robinhood alternatives for traders and investors active in stocks, cryptocurrencies, or other assets.

    What to Look For

    Robinhood has become one of the most popular brokerages globally thanks to its easy-to-use mobile app, gamified trading experience, and commission-free trading. However, depending on your priorities, several Robinhood alternatives provide a similar or better experience. The key is knowing what to look for in these brokerages and finding the best fit.

    Some essential considerations include:

    • Cost: Commission-free trading has become increasingly popular since Robinhood's launch, but traders should look out for spreads (in crypto), slippage, and miscellaneous account fees.
    • App: Robinhood provides an app-first trading experience, which only a handful of other brokerages offer. If mobile trading is a priority, you should seek out brokers that prioritize apps.
    • Products: Robinhood offers access to a range of stocks and cryptocurrencies. Each broker offers different products, so make sure your choice has the ones you want to trade.
    • Tools: Robinhood has a simple interface for beginners, but other brokers offer sophisticated technical analysis, fundamental analysis, and other trading tools for intermediate or advanced users.

    In addition to these features, you might select a broker for its unique offerings. For example, eToro's CopyTrader makes it easy to automatically place the same trades as another user on the platform, or Acorn's Round-Ups make it easy to build up your account value with spare change. These features may be a reason to switch all on their own.

    Finally, if you’re using a cryptocurrency exchange, you should ensure that they provide the tax reporting information that you need. Traders and investors that want to ensure accuracy or connect multiple wallets and exchanges may want to consider ZenLedger, which aggregates transactions, computes capital gains and losses, and pre-fills popular IRS forms.

    #1. Coinbase

    Just as Robinhood made it easier to trade stocks, Coinbase brought cryptocurrencies to the masses. The exchange launched in 2012 and quickly became the largest cryptocurrency exchange globally, with more than 50 million users worldwide and $4 billion in revenue. In fact, the exchange has far more assets under management than Robinhood!

    Robinhood Alternatives
    Coinbase Pro’s sophisticated trading platform. Source: Coinbase

    Pros

    • Coinbase Pro offers advanced trading tools and low-cost trading for intermediate to advanced traders.
    • Coinbase is one of the most trusted names in crypto with an insurance policy in place.

    Cons

    • Coinbase doesn't offer as many cryptocurrencies as other platforms, like Binance.
    • Coinbase (non-Pro) has higher costs than most other crypto exchanges out there.

    #2. Acorns

    Robinhood democratized investing through its use of fractional shares, enabling anyone to purchase high-priced stocks. Acorns takes a similar approach, but rather than letting you speculate on individual stocks, the company builds a diversified portfolio funded by rounding up transactions to the nearest dollar—what it calls Round-Ups. These capabilities make it among the best Robinhood alternatives for beginner investors.

    Robinhood Alternatives
    Acorns provides an easy-to-use app. Source: Acorns

    Pros

    • Acorns makes it easy to invest your spare change to build long-term value without any hard work.
    • Acorns ensures that your portfolio matches your risk tolerance while constantly rebalancing it for you.

    Cons

    • Acorns doesn't let you speculate on individual stocks, such as GameStop, like Robinhood.
    • Acorns has a relatively high cost when you have a low account balance but gets cheaper over time.

    #3. WeBull

    WeBull provides many of the same features as Robinhood, such as fractional shares and a mobile app, making it a viable alternative to Robinhood. In addition to these features, WeBull offers sophisticated trading tools designed for intermediate and advanced traders, making it a good choice for those looking to move on from the simplicity of Robinhood's user interface.

    Robinhood Alternatives
    WeBull provides a sophisticated technical analysis platform. Source: PCMacStore

    Pros

    • WeBull provides a mobile and desktop app that's fully customizable to support intermediate and advanced traders.
    • WeBull offers virtual trading, which is an excellent way to get up to speed and test out new strategies.

    Cons

    • WeBull doesn't provide access to many conventional securities, such as bonds, mutual funds, or OTC stocks.
    • WeBull has a learning curve and may seem overwhelming for beginners that are just getting started.

    #4. eToro

    eToro is a crypto-specific platform with over 20 million users worldwide. While it provides access to many of the same cryptocurrencies as Coinbase, the platform also offers unique tools, like CopyTrader, enabling you to copy trades made by another trader automatically. You can also access a demo account to practice trading risk-free.

    Robinhood Alternatives
    eToro makes it easy to copy successful traders. Source: Cryptimi

    Pros

    • eToro only offers services in 41 states due to various restrictions, so it might not be an option for some users.
    • eToro has become famous for its social investing platform, including its CopyTrader functionality.

    Cons

    • eToro has higher spreads on some popular cryptocurrencies compared to other platforms.
    • eToro doesn't offer as many cryptocurrencies as some platforms, such as Binance.

    ZenLedger and eToro have recently partnered on a promotion where participants will receive a free ZenLedger crypto tax year plan valued at $149 when you create an eToro account through ZenLedger and trade $100. Read more about how you can get a free ZenLedger tax plan.

    #5. TradeStation

    TradeStation goes beyond WeBull to provide sophisticated trading tools for advanced traders while still offering $0 trades to compete with Robinhood. In addition to its advanced technical analysis tools, the platform offers comprehensive research, a community of active traders, and the TradeStation Simulator to practice trading.

    Robinhood Alternatives
    TradeStation provides a lot of features and functionality. Source: TradeStation

    Pros

    • TradeStation is the gold standard for advanced active traders with a programmable platform.
    • TradeStation offers access to a wide range of different securities and cryptocurrencies.

    Cons

    • TradeStation has complex plans and pricing, which requires some effort to understand and set up.
    • TradeStation has a learning curve for beginners and even some intermediate traders and investors.

    The Bottom Line

    Robinhood is one of the most popular brokerage platforms in the U.S. with its easy-to-use, app-driven experience. If you're a Robinhood user looking for something new, there are many different Robinhood alternatives, including Coinbase, Acorns, WeBull, eToro, and TradeStation. The right decision ultimately depends on your requirements and preferences.

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