On Friday, Robinhood launched its cryptocurrency pockets to 2 million waitlisted customers, in a long-anticipated transfer that would have big implications for the brand new crypto sector. However, it comes with severe limitations.
The Robinhood app has supplied crypto buying and selling for round three years. Last 12 months’s fourth-quarter income of $48 million was generated from crypto.
However, the brand new pockets, whose beta went reside in September 2021, permits customers to work together instantly with crypto, providing the chance to tip creators on social media with digital forex, and scan a QR code to ship crypto to one other pockets.
Individuals can ship up to $5,000 price of crypto or make 10 transfers complete in a 24-hour interval, in accordance to the web site. Unlike Coinbase, which fees a 1% payment to convert crypto to fiat for withdrawal, Robinhood doesn’t cost any charges.
NFTs prohibited
While the large rollout appears to be an enormous transfer for Robinhood, customers are coming to discover out concerning the many restrictions that got here together with the crypto pockets launch.
Unfortunately, the pockets can’t maintain any NFTs nor can it maintain crypto aside from these at present traded on the Robinhood app. Specifically, ERC-20 tokens are prohibited from being held within the pockets, forcing customers to take into consideration various avenues to maintain their crypto belongings.
Other unsupported cryptocurrencies embody Tether, Binance Coin, and Solana, whereas extra widespread currencies like Bitcoin, Bitcoin Cash, Ethereum, and Ethereum Classic are supported.
(*2*) the corporate web site states.
Users look to transfer belongings to personal wallets
For these belongings bought on Robinhood prior to the corporate introducing the pockets, customers would have had to settle for that these belongings can be “stuck” with out having any capability to transfer them out of Robinhood and into a personal pockets.
Taking to Reddit, customers began posting to the platform, stating they’d be shifting their forex to personal wallets, sharing any hints and recommendations on promoting present belongings for fiat.
According to a Robinhood spokesperson, the interplay between Robinhood wallets and the broader crypto ecosystem is sweet for the trade, and they don’t see the egress of belongings as a trigger for concern.
“We want to provide the best trading and investing experience in the industry, and we think this opens the door to more customers and capital for crypto. Increasing flows between customer investment accounts and the crypto ecosystem is great news for the entire crypto industry,” they mentioned.
As of December, Robinhood noticed 17.3 million lively customers on its app, due to its easy interface and commission-less buying and selling benefits.
Considering the buying and selling app started as a inventory brokerage geared in direction of the normal inventory market, the query stays to be seen on whether or not Robinhood will proceed to appeal to extra customers to its platform given its newest crypto pockets launch.
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