Robinhood Crypto acquires Cove Markets to enhance execution quality

Rick Steves

The Cove Markets team will help Robinhood enhance its crypto trading platform, with a focus on obtaining quality executions for customers in the crypto market.

Robinhood has announced the acquisition of Cove Markets, a cross-exchange trading platform that makes it easier for people to manage their crypto accounts.

The Cove Markets team, including co-founders Scott Knudsen and Victor Glava, will join the Robinhood crypto team.

Crypto trading execution and market infrastructure

Scott Knudsen, CEO and Co-Founder of Cove Markets, said: “We started Cove Markets three years ago to help crypto investors get the most out of their trading experience. Now, we are excited to join Robinhood to help build a world-class platform that can improve trading for millions of customers.”

Christine Brown, Chief Operating Officer of Robinhood Crypto, commented: “Scott, Victor and the Cove Markets team will bolster our crypto trading platform and help us strengthen our leadership in the crypto industry. Their wealth of experience in trading execution and crypto market infrastructure will help us to build more powerful trading capabilities, bringing the benefits of better competition in the crypto markets to our customers.”

Robinhood Crypto was launched in 2018 with the mission of making crypto more accessible and easier to understand, all while continuing to offer zero-commission fees.

The Cove Markets team will help Robinhood enhance its crypto trading platform, with a focus on obtaining quality executions for customers in the crypto market.

Public.com is a stock trading platform that rivals Robinhood and is now throwing stones at the PFOF model as well as claiming it has achieved “better execution quality on average to customers” than competitors that rely on PFOF from market makers, such as the relationship between Robinhood and Citadel Securities.

Robinhood’s PFOF model under attack

Robinhood rival Public.com has been throwing stones at the PFOF model as well as claiming it has achieved “better execution quality on average to customers” than competitors that rely on PFOF from market makers, such as the relationship between Robinhood and Citadel Securities.

As to effective spread over quoted spread (EFQ), Robinhood stood at 44.79% while Public.com achieved 32.88%, demonstrating better execution quality. The impacts of other metrics, like AOB and Price Improvement, are naturally reflected in EFQ.

As to net price improvement – measured by taking the gross price improvement per share and subtracting any executions that slip outside of NBBO, then averaging that across all shares traded – Public.com also outmatches Robinhood: $1.18 against $1.72.

The short squeeze lawsuit may be going in favor of Citadel Securities and Robinhood, but that doesn’t the PFOF model is not at the end of the road. Most countries have already banned it outright. It might be a question of time for the US to do the same.

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