Does Crypto Count as a Day Trade?

For many investors in the stock and EFTs market, cryptocurrency trading has opened so many possibilities for new investments. But do the same rules apply to crypto trading, and does crypto count as a day trade? These and many other questions will be answered in this article.

Does crypto count as a day trade? The answer is no. The crypto market is open 24/7, seven days a week. Crypto trading is international, and it is not regulated by FINRA or SEC like stocks and other options.

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When you have a market that is never closed, there’s an abundance of opportunities for many investors. Still, there can be some limitations on crypto trading depending on the platform you are on. Let’s find out more about this.

What Is Day Trading Limitation Or Pattern Day Trading

For those who have never traded stocks, EFT, and other options, you probably never heard about pattern day trading. It is a rule that applies to all stock markets, limiting your daily trading. These rules are set by FINRA, and they define the day trade to be when a person sells and buys the same security on the same market day. You become a “pattern day trader” when you execute four such trades in five business days.  

Crypto Market Trading Is Unregulated by FINRA

Even though FINRA does not regulate crypto trading, the brokers and professionals you hire to invest in crypto on your behalf must have a FINRA certification. FINRA’s job is to regulate all financial professionals, stockbrokers, and financial advisors that deal with stocks, securities, and other investments. This way, FINRA regulates professionals, not securities themselves.

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Does Crypto Count as a Day Trade?

As we already answered above, crypto doesn’t count as a day trade. You can trade the cryptocurrency as much as you want. Still, day trading crypto is not an easy thing to do, and you will need to have a certain set of skills to manage your trade and earn money in the process. Here are the three most popular crypto trading strategies you can implement. 

Name of the strategyHow does it work?Who is it for?
Range TradingInvestors look at the price range to see when is the safest time to buy and sell the crypto.It is best for beginners who wish to make safe trades.
High-Frequency TradingUses a computer program that uses algorithms to analyze market data entry and exit points in millisecond timeframes.Best for investors who have the competence to build a trading bot.
ScalpingInvolves taking advantage of small price moves during short-term timeframes.This way, investors are capitalizing on small price movements.Best for those who are willing to trade on margin.

Cryptocurrency Trading on Robinhood?

Robinhood is a popular stock market that also allows crypto trading. When it comes to day trading of the cryptocurrencies on Robinhood, there are no day limitations, and you can trade as much as you want. But in order to trade crypto on Robinhood, you need to have a financial account opened. This financial account will be linked to your crypto account. On Robinhood, you don’t actually own the coins when trading with crypto, but you invest in them.

This means all coins must be backed up by cash on your financial account. So if your financial account is flagged for pattern day trading, you will not be able to trade crypto either. In fact, if your financial account is blocked for any reason, you will not be able to trade crypto coins either. So if you traded with stocks or other securities on your financial account and you become a pattern day trader, this will affect your ability to trade crypto. On the other hand, if you trade crypto all day and night, this will have zero effect on your financial account. 

What Are Trading Times for Crypto on Robinhood?

There is also a time on Robinhood when you can not trade crypto. These time frames are set to be every day from 5:29 PM – 5:40 PM ET and 11:57 PM – 12:09 AM ET due to maintenance of the platform. This time frame is scheduled to happen every day, but unexpected maintenance can occur for bugs and error fixing. In any case, you will be informed about this on time. 

What Is the Maximum Amount of a Cryptocurrency You Can Trade On Robinhood?

On Robinhood, you can trade as long as you want, but there are limitations on the number of cryptocurrencies you can buy and hold. That is called position limits, and these numbers can be changed by Robinhood. Take a look at the limitations for the most popular coins.

Limitation of max $16,000,000 per cryptocurrency:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Dogecoin (DOGE)

Limitation of max $5,000,000 per cryptocurrency:

  • Bitcoin Cash (BCH)
  • Bitcoin SV (BSV)
  • Litecoin (LTC)
  • Ethereum Classic (ETC)

Crypto Trading Is Available 24/7

As you can see, you can trade crypto without any time frame limitations. And even though this leaves many opportunities for investing and earning some profit, you need to have a certain set of skills to turn crypto day trading into a full-time job. Not to mention you will have to invest in technical aspects of crypto trading if you wish to achieve maximum. On the other hand, if you are a beginner at crypto trading, the best course of action is investing in coins in the long run. Or to hire a professional who can make the trades for you.