We all know that the pandemic was a dark era for everyone worldwide. This was when people lost their loved ones, some lost their jobs, and many other devastating things happened. But among those terrible times, Robinhood was the light for millennial investors.

A financial technology app that was there for the millennials during the COVID-19 era so they could start investing. This is the perfect way for traders to buy and sell stock even when they are closed in their homes. Robinhood was the Facebook or Instagram for the millennials during this time, and because of this app, they could make money when the world was on pause. In this article, you will learn everything about the Robinhood app and how it helped millennials.

What is Robinhood?

Robinhood is a financial technology-based app through which people can easily trade and sell their stocks. Robinhood Markets Inc. is a financial company that was founded in the year 2013. This company was founded by two entrepreneurs, Vladimir Tenev and Baiju Bhatt. They both made an evolutionary and innovative app that changed the trading system.

This is a commission-free platform where people can start investing with the smallest amount of money. This application can be used both on web browsers and the mobile-interfaces. Another great feature of this app is that people can buy and sell stocks, exchange traded funds, and even use American depositary receipts. Furthermore, the users are also allowed to invest in some cryptocurrencies.

At this moment, this application has more than 13 million users. Hence, this application is very vast and can be used by many people all over the world.

The Popularity of Robinhood among the Millennials:

Millennials are people who were born between the years 1981 and 1996. The millennials are older adults who are unaware of the latest technology. However, when the Robinhood app was launched, this allowed the millennial to take full advantage of the technology.

One of the main reasons this application is famous among millennials is that it is straightforward to navigate. With the most explicit interface and easy accessibility, millennials could effortlessly buy and sell their stocks.

Another great thing about this app is that it was a no-investment application. This means you don't have to pay for any subscription; there are no commission-based brokers and no kind of investment. No penalty or loss of money made people much more excited to use this application.

With all these features, the security system of Robinhood was also excellent. It was ensured that the information of the users would be protected. Furthermore, the stocks and money that the people were using here were also secured from intruders. All of this made this application one of the best investing apps in the world.

How Robinhood App Effected the Stock Market?

During the pandemic, the gates of the stock market were opened because of the Robinhood app. People who had some knowledge about stocks and trading started using this application. This app had a positive impact on the stock market. This was because a lot of people started using this application. After all, it was accessible and convenient. It was also commission-free, which spiked more interest. About 98,000 Americans used this application, and about 3% of the brokers used the Robinhood app. At the same time, Gen Y and Gen Z people were about 70% on this platform.

With the positive impact of this application, there is also a negative impact of this app on the stock market. People criticized the application as it turned a severe field and business into a game and casino effect. Many people also filed complaints against the company because they thought this was a stupid way to attract people and cause many problems in the stock market.

The traders and stock market people did not like how people used this app because it was more like a video game than an investing tool. The company had to pay about $65 million to eliminate the charges.

How does Robinhood Make Money?

Now, the question comes to how Robinhood makes money as it is a commission-free application. This application makes money through the payment for order flow. This means the users who make their orders go through the market maker. From here, the traders compensate the money at a fraction rate and then deliver it to Robinhood.

Since so many people use this application, the rate per share makes it very easy for Robinhood to make money. Other than that, they also make money by investing the user's cash. They invert the currency with the interest rate and then keep a percentage of that with themselves while giving the rest back to the users. They also earn money from the premium Gold services. This means the Gold users must pay through the debit card and take small revenue for different services. This is the simple way Robinhood makes money while keeping it accessible for the users.

Recent Developments of Robinhood:

When it comes to Robinhood's recent developments, it is seen that they have announced their retirement plans. They will make a waitlist for the users that will be accessible for a few weeks, and the program will be accessible till January.

Conclusion:

Robinhood is an evolutionary application that changed the entire stock market after its release. It created a lot of havoc in the industry because it attracted a lot of millennials even though the world was in a shutdown phase. This also allowed millennials to trade, buy, sell stocks, and do other things while sitting at home. Hence, this application was a hit during the Covid-19 era when people wanted some way to earn money.