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If you've invested in cryptocurrency through Robinhood, you may wonder about the status of your digital assets. Currently, Robinhood has paused buying and selling for select cryptocurrencies, though users can still hold existing investments. While the platform displays crypto holdings in portfolios, transactions remain suspended indefinitely.
Tax Implications of Crypto Investments
Capital Gains Taxes
Cryptocurrency is taxed as digital property, similar to other capital assets. Profits from sales incur either:
- Long-term capital gains tax (if held >1 year)
- Short-term capital gains tax (if held ≤1 year)
🔹 Key Notes:
- Converting between cryptocurrencies (e.g., Bitcoin to Ethereum) counts as a taxable sale.
- Losses can offset taxable gains via capital loss deductions.
Tax Documents from Robinhood
Expect these forms by mid-February:
| Form | Purpose |
|------|---------|
| 1099 (Robinhood Securities) | Stocks, ETFs, options |
| 1099 (Robinhood Crypto) | Cryptocurrency sales/miscellaneous income |
| Amended 1099 | Corrections to initial filings |
👉 Learn more about crypto tax strategies
How to Buy Crypto on Robinhood
Requirements
- U.S. residency (including Puerto Rico/Virgin Islands)
- Social Security Number
- Minimum $1 in your account
Steps
- Open a Robinhood account.
- Link and verify your bank.
- Choose from 19 supported cryptocurrencies (e.g., Bitcoin, Dogecoin).
- Place orders for fractional or full coins (except Dogecoin: 1 DOGE minimum).
🔹 Features:
- FINRA-regulated platform
- Cold storage for asset security
- Recurring purchase options
Security Measures for Robinhood Crypto
Robinhood prioritizes safety with:
- Cold Storage: 90% of assets offline.
- Crime Insurance: Partial coverage via Lloyd’s syndicates.
- 2FA & Strong Passwords: Recommended for account protection.
⚠️ Hot Storage Risks: A small portion of coins are online, with limited insurance coverage.
Pro Tip: Transfer coins to a personal cold wallet for maximum security.
👉 Explore secure crypto storage options
Supported Cryptocurrencies on Robinhood
| Coin | Symbol |
|------|--------|
| Bitcoin | BTC |
| Ethereum | ETH |
| Dogecoin | DOGE |
| Solana | SOL |
| ...and 15 others | (Full list here) |
Note: State laws (e.g., NY/Texas) may restrict trading for certain coins like USDC.
FAQ Section
Q: Can I withdraw crypto from Robinhood?
A: Currently, withdrawals are paused for select coins. Monitor Robinhood’s updates.
Q: How are crypto conversions taxed?
A: Treated as sales—subject to capital gains taxes based on holding period.
Q: Is Robinhood Crypto safe?
A: Yes, with cold storage and insurance, but consider a private wallet for added security.
Q: What’s the minimum investment for Dogecoin?
A: 1 DOGE (other coins allow fractional purchases).
Final Thoughts
Robinhood offers a user-friendly gateway to crypto, but stay informed on tax rules and security best practices. For active traders, diversifying with external wallets is advised.