Robinhood enters Canada with focus on cryptocurrency. What to know - BERITAJA

Robinhood, a U.S. integer investing platform, officially acquired Canadian cryptocurrency trading institution WonderFi connected June 1, which besides intends it now owns cryptocurrency platforms Bitbuy and Coinsquare.

Robinhood said successful a merchandise that users connected those apps will beryllium invited to usage the Robinhood app erstwhile it becomes disposable successful the coming weeks.

With the emergence of integer investing tools, location is besides increasing questions and concerns about whether apps could promote immoderate investors to return much risks.

Here’s what to know.

Robinhood is akin to WealthSimple, Questrade and galore different apps that let users to put their money done self-managed aliases managed accounts.

This includes investing for registered status savings scheme accounts on pinch tax-free savings accounts and location savings accounts, among different finance vehicles.

These types of integer investing devices person grown much celebrated successful caller years because users could perchance prevention money connected commissions and fees by eliminating portfolio managers and different investing experts.

In the U.S., Robinhood offers users the expertise to bargain and waste cryptocurrency, successful summation to stocks and different assets, but a spokesperson from Robinhood confirmed to BERITAJA that, astatine slightest for now, its services successful Canada will beryllium “exclusively focused connected cryptocurrency.”

“WonderFi has extended acquisition operating regulated crypto platforms that service beginner and precocious crypto users alike, making it an perfect partner to accelerate Robinhood’s ngo successful Canada,” Johann Kerbrat, elder vice-president and wide head of Robinhood Crypto & International, said successful the release.

“We’re pleased to person closed our acquisition and look guardant to delivering innovative, user-centric investing products to Canadian customers.”

Some integer investing apps are besides designed likewise to online betting apps, which critics opportunity could summation the consequence for immoderate self-investors who position activities for illustration time trading and accelerated buying aliases trading of investments arsenic a measurement to effort to profit.

“Encouraging group to put money that they could spend to put successful assets that they understand is not needfully a bad thing,” said individual finance master Clay Jarvis astatine NerdWallet Canada.

“But encouraging group to put pinch money they can’t spend to suffer into companies they don’t understand — that is simply a problem.”

The Securities and Exchange Commission (SEC) successful the U.S. referred to this arsenic “gamification” of investing and has noted the inclination crossed a scope of platforms focusing connected “retail investors.”

“These devices see behavioral prompts, differential marketing, game-like features (commonly referred to arsenic gamification), and different creation elements aliases features designed to prosecute pinch unit investors connected integer platforms (e.g., websites, portals, and applications),” the SEC said successful a merchandise from August 2021.

This “gamification” affinity describes the ocular and different cues recovered connected immoderate of these platforms that are comparable to online casinos, which makes investing moreover much risky for galore users.

Jarvis says these types of features could beryllium “manipulative.”

“A batch of those elements onslaught maine arsenic gross and manipulative and the activity of a large institution to effort to amended its bottommost line,” he said.

“When you talk about those elements, I would beryllium much worried about them being directed astatine young, inexperienced investors who mightiness beryllium a small much prone to falling for them.”

Investing, Jarvis says, shouldn’t beryllium seen arsenic a game, and self-investors request to person patience and position erstwhile choosing wherever to parkland their money.

“You don’t want to beryllium perpetually nudged to make decisions pinch your down costs savings aliases your status savings. These are things that you request to protect.”