In its latest cryptocurrency expansion, Robinhood is introducing a feature that gives traders more control over digital tokens.
In a blog post published Wednesday, the newly public brokerage announced that it will begin testing “crypto wallets” with a select group of clients next month. Investors will be able to trade, send, and receive digital currencies, as well as move them in and out of the Robinhood app, using the wallet.
On Wednesday, Robinhood’s share price increased by 5%.
Some customers, notably Dogecoin traders, have turned to social media in recent months to protest that using Robinhood as their broker gave them access to crypto pricing but not true ownership of the coins.
This is the natural next step for us when we think about democratizing finance for all, being able to have a lot more people from a lot of different contexts participate in this emerging market, and wallets are the key,” Aparna Chennapragada, Robinhood’s chief product officer, said in an interview.
According to Chennapragada, who spent 12 years at Google directing product, engineering, and design teams before joining Robinhood, some clients will begin testing the system, and Robinhood will publish their comments via its blog and Twitter. Clients on the queue will ultimately be able to join the rollout.
Robinhood’s cryptocurrency business is expanding
Although the start-up just started trading cryptocurrencies three years ago, it has grown in importance to the company’s bottom line. Cryptocurrency trading accounted for more than half of Robinhood’s transaction-based income last quarter, up from only 3% a year ago.
Clients will be able to aggregate their digital currency into one account using the new wallets. Clients may then trade, transfer, and receive cryptocurrency between wallet addresses. Coinbase and Gemini, two competitors, already have this functionality. The idea to put out this functionality in a test version of Robinhood’s trading app was originally revealed by Bloomberg News.
Since bitcoin’s all-time high in April, the price of bitcoin and other cryptocurrencies has been very volatile, owing to increased regulatory worries.
On Monday, cryptocurrency prices fell along with the rest of the market, with bitcoin closing the day roughly 7% down. The decline reignited discussion over whether bitcoin can or should be considered a safe-haven asset. Bitcoin has demonstrated a greater tendency to drop with the larger markets in recent years.
On Wednesday, Robinhood announced the launch of a new tool that allows users to set up regular bitcoin investments. For as little as $1, clients may plan a commission-free cryptocurrency purchase.
The broker’s action comes as the Securities and Exchange Commission, notably Chairman Gary Gensler, is increasing his scrutiny of cryptocurrencies. Last week, Gensler told legislators that Wall Street’s top regulator is working around the clock to develop a set of regulations to regulate the volatile cryptocurrency markets while also protecting the interests of American entrepreneurs.