Robinhood's default route for cryptocurrency orders on the platform carries a significant cost for Bitcoin traders. The spread—the gap between buy and sell prices—reaches close to 2% for a round-trip transaction, according to the company's own disclosures.
Delphi Digital co-founder Tommy Shaughnessy drew attention to the issue this week, posting a screenshot showing a Bitcoin spread of $1,426.03 and questioning Robinhood's chief executive about the figure. His example showed a bid of $75,361.72 against an ask of $76,787.76, representing a gap of 1.87%.
How the Spread Works
The spread is the difference between the price to buy an asset and the price to sell it. Robinhood's default setting, called market maker routing, directs crypto orders to an outside trading firm rather than an exchange. Robinhood Crypto receives $0.95 for every $100 of volume routed this way.
This payment is embedded within the quoted prices rather than shown as a separate fee. Buyers pay the higher price and sellers receive the lower one, resulting in a combined cost of approximately 2% before any market movement.
Alternative Options Available
Johann Kerbrat, senior vice president and general manager of crypto at Robinhood, pointed to a second routing option called Smart Exchange Routing. This alternative charges a disclosed fee ranging from 0% to 0.95%, with the fee declining as a trader's 30-day trading volume increases.
Kerbrat also clarified that customers can transfer Bitcoin directly to external wallets without selling first, contradicting a separate claim about withdrawal requirements.
Additional Platform Restrictions
Robinhood restricts agentic trading accounts from transferring, staking, or lending cryptocurrency. The company opened agentic trading to crypto earlier this year, allowing outside AI agents to trade through separate accounts on the platform.
