Robinhood Releases Crypto Wallet to 2M Users
The trading app showed off its crypto skills in a pair announcements made at the Bitcoin 2022 conference. However, read the fine print.
MIAMI — Robinhood Markets, (HOOD), announced Thursday that it activated its crypto wallet to 2 million customers who are “eligible”. This makes digital asset transfers in the long-firewalled investments app broadly possible.
Aparna Chennapragada, Chief Product Officer, made the announcement at the Bitcoin 2022 conference held in Miami.
A handful of wallet beta testers were able to move bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and other traded coins into and out of Robinhood’s Walled Garden before. All waitlisted customers who are not in the regulatory no-go areas Nevada, New York, and Hawaii can now do so.
She also stated that Robinhood will support bitcoin transactions on Lightning Network, which is a fast, low-cost settlement network for Bitcoin.
She said that this was a great way for the wider community to get bitcoin in a cheap and green manner, as well as pointing out that BTC is the most recurring purchase on the app.
Robinhood’s crypto push
Robinhood’s first teased in September, Robinhood’s crypto wallet forks over advanced features such as self-custody. A FAQ page stated that “Corporate wallets” control customers’ private keys. It also said that those who want their own bank could move their digital assets to another place.
Day traders who first experienced crypto markets betting on Robinhood’s DOGE won’t find this much of a problem. They can now send and spend those meme coins, perhaps for Dallas Mavericks basketball Tickets or a Tesla-branded belt cuff.
Robinhood claims that nearly 10 million Robinhood users exchanged coins in the first quarter of last year, a sign of its crypto appeal. Robinhood’s nearly three-year-old crypto trading functionality has resulted in a surge of revenue. Last quarter, the publicly traded company generated $48 million.
Vlad Tenev, CEO of Cryptolinks, stated in a press release that wallets are only one step to connect customers to the wider crypto ecosystem.
Limitations of Robinhood’s crypto
Robinhood’s multiasset wallet is still lacking in functionality. It is not able to connect to Ethereum-based services like MetaMask. It can’t accept ERC-20 tokens or non-fungible tokens NFT, nor any other asset that is not on Robinhood’s trading lists. Airdrops and forks tokens will not work.
The FAQ page stated that “any NFTs sent from Robinhood Ethereum addresses may be lost and irrecoverable.”
For now, stakes are not allowed. Tenev previously acknowledged the customers’ desire to have the yield-earning feature. He also said that Robinhood was investing into the technology during the last quarter’s earnings calls. He stated that a staking service must be “compliant.”
For transferring their Robinhood-based cryptocurrency into wallets with such capabilities, users won’t have to pay any fees. According to the company, it will charge estimated gas fees for outbound transfers but not withdrawal fees.
The web page stated that outbound transfers have a daily limit of $5,000 and newly acquired crypto remains in place until the transaction settles. To access the wallet, users will need to undergo an identity verification and enable two-factor authentication.