Robinhood charges no commission when you sell crypto, but the price you receive is lower than the market price

When you sell cryptocurrency on Robinhood, you pay zero commission — Robinhood does not take a percentage cut of your sale. Instead, Robinhood makes money through the spread, which is the difference between what buyers are willing to pay and what sellers are asking. On Robinhood, you sell at the lower end of that spread, meaning you receive less per coin than the current market price shown elsewhere.

The spread varies by cryptocurrency and market conditions. Bitcoin and Ethereum, which trade in high volume, typically have smaller spreads — sometimes under 1 percent. Smaller or less-traded coins can have spreads of 1 to 2 percent or more. You will see the exact price Robinhood is offering before you confirm the sale, so you know the spread before you commit.

This is different from a commission fee, which would be a flat dollar amount or percentage that Robinhood takes on top of the sale price. Robinhood does not charge that. But the spread means you are still paying Robinhood for the transaction — you just pay it through a lower sale price rather than a separate line item.

Key Takeaways

  • Robinhood charges zero commission on crypto sales, but you sell at a price lower than the market rate due to the spread.
  • The spread is typically under 1 percent for major coins like Bitcoin and Ethereum, and higher for smaller or less-traded cryptocurrencies.
  • You see the exact sale price before you confirm, so you can decide whether the spread is acceptable.
  • Robinhood's revenue from crypto comes from the spread, not from a separate fee charged to you at checkout.

How the spread works when you sell

When you place a sell order on Robinhood, the app shows you a price per coin. That price is what Robinhood will pay you — it is already the spread-adjusted price, not the raw market price. Robinhood buys your coins at that price and then sells them to other buyers or market makers at a slightly higher price, keeping the difference.

The spread exists because Robinhood has to hold your coins for a moment between buying them from you and selling them to someone else. During that time, the market price could move, and Robinhood takes on that risk. The spread compensates Robinhood for that risk and for the cost of running the trading platform.

You cannot negotiate the spread or choose a different price. The price shown is the price you get if you sell immediately. If you wait, the market price may move up or down, and so will the spread-adjusted price Robinhood offers you.

Comparing spreads across cryptocurrencies

Major cryptocurrencies have tighter spreads because they trade constantly and Robinhood can move them quickly. Bitcoin and Ethereum spreads are usually the smallest. Altcoins — smaller cryptocurrencies with lower trading volume — have wider spreads because Robinhood faces more risk holding them and more difficulty finding a buyer.

Robinhood does not publish a spread table, so you cannot look up the exact spread for a coin before you open the app. The only way to see what spread you are facing is to go to the sell screen for that cryptocurrency and look at the price offered. If the spread seems too wide, you can wait and check again later, or you can choose not to sell.

Spreads also change throughout the day. During hours when the market is most active — typically during US stock market hours — spreads tend to be tighter. During off-hours or weekends, spreads often widen because fewer people are trading and Robinhood has fewer counterparties to sell to.

Why Robinhood uses spreads instead of commissions

Robinhood built its reputation on zero-commission stock trading, and it extended that model to crypto. From a customer perspective, zero commission sounds better than paying a fee. From Robinhood's perspective, spreads are actually more profitable when trading volume is high, because the company makes money on every transaction without having to disclose a separate fee.

Other crypto platforms use different models. Some charge a flat commission (like 1 percent) on top of the market price. Others use spreads like Robinhood. A few offer both options depending on the account type. The spread model is common in retail trading because it is less transparent — you do not see a line item labeled "fee" — but it is not unique to Robinhood.

What happens to your sale proceeds

When you sell crypto on Robinhood, the proceeds land in your Robinhood cash account, not in your bank account. From there, you can use the money to buy other stocks or crypto, or you can transfer it to your linked bank account. Transfers to your bank account usually take one to three business days, depending on your bank.

Robinhood does not charge a fee to transfer cash out. The only cost is the spread you already paid when you sold the crypto. Once the money is in your cash account, it is yours to move or spend as you choose.

Tax reporting for crypto sales

When you sell crypto at a gain, you owe capital gains tax on the profit. Robinhood tracks your cost basis (the price you paid) and your sale price, and it reports this information to the IRS on Form 8949 if you sold more than a certain amount. You are responsible for reporting the gain on your tax return, even if Robinhood does not send you a form.

The spread you paid does not reduce your taxable gain. If you bought Bitcoin for $30,000 and sold it when the market price was $35,000, your gain is $5,000 even if Robinhood's spread meant you only received $34,650. The spread is a cost of selling, but it does not change your tax basis.

Keep records of your buy and sell dates, prices, and amounts. Robinhood provides a transaction history in the app that you can export, which makes tax time easier.

Frequently Asked Questions

Can I sell crypto on Robinhood without paying any fee at all?

No. Robinhood charges no commission, but you pay through the spread — the difference between the market price and the price Robinhood offers you. The spread is typically under 1 percent for major coins, but it is still a cost.

Is Robinhood's spread the same as other crypto platforms?

No. Spreads vary by platform and by coin. Some platforms charge a flat commission instead of using spreads. The only way to compare is to check the price each platform offers for the same coin at the same time.

What if I think Robinhood's spread is too high?

You can wait and check the price again later, or you can choose not to sell. You can also move your crypto to a different platform if you have a wallet address, though Robinhood does not currently support withdrawals of crypto to external wallets.

Do I owe taxes on the spread I paid?

The spread is a cost of selling, but it does not reduce your taxable gain. Your gain is calculated as the sale price minus your cost basis, regardless of the spread. The spread is a separate expense.

Why does Robinhood's spread change throughout the day?

Spreads widen when trading volume is low and Robinhood has fewer buyers available. During US market hours, spreads are usually tighter. Nights, weekends, and holidays typically see wider spreads because fewer traders are active.