Robinhood Finds Trouble with Rapid Growth

Robinhood has become a buzzword in fintech and even on cable news programs with more day traders taking to the app during shelter in place orders; the fintech has grown in users and valuation but there is a cost to the growth as some traders have found themselves under a mountain of debt; Robinhood has made trading so easy and cheap, but many believe the more complex trades should have greater barriers because most novice traders do not fully understand what they are doing; “They encourage people to go from training wheels to driving motorcycles,” Scott Smith, who tracks brokerage firms at the financial consulting firm Cerulli, said of Robinhood to the New York Times. “Over the long term, it’s like trying to beat the casino.”; the company has committed to making changes in recent weeks and have also said they will increase the amount of financial information available so traders can learn more about what they are doing; greater responsibility comes as more users continue to come to the platform and look to cash in on what has become a volatile market. New York Times.

  • Todd Anderson

    Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.