Robinhood plans to expand its cryptocurrency trading operations and may add new coins to the platform.
“We want to make a huge investment and hire a ton of people,” said CEO Vlad Tenev in a video posted by the company on March 18. “We’re going to try and get that done as fast as possible. We might add some new coins along the way.”
The Menlo Park, California-based online brokerage added cryptocurrency trading features to its platform in 2018. But that business has only recently taken off. In February, Robinhood revealed it had added 6 million crypto customers in less than two months, though it declined to share the total number of customers trading crypto on the platform. In 2020, the monthly average of new customers trading on Robinhood Crypto was approximately 200,000.
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Users can buy bitcoin, ethereum, and a handful of other cryptocurrencies but can’t transfer coins to and from their accounts. In February, the company said it intends to provide the ability to deposit and withdraw cryptocurrencies, including the popular meme coin DOGE, in the future.
In the video, Tenev said his team had hesitated to launch cryptocurrency trading without those capabilities. “The reason I think we ultimately decided to do it is there is a use case for people that don’t want to manage their own coins and just want to treat it as an investment,” said Tenev. “That said, we want to give people the option [to manage their own wallets and keys] for sure.” Cryptocurrency wallets keep users’ private keys – essentially passwords that give users access to their crypto – and allow them to send and receive bitcoin and other digital assets. They come in various forms including hardware devices and mobile apps.
To make the case for trading bitcoin on Robinhood, Tenev compared the app’s commission-free investing with Coinbase, the largest cryptocurrency exchange in the U.S. Coinbase charges a commission of one-half of one percent (0.50%) for cryptocurrency purchases and sales.
But cryptocurrency traders, far more sensitive to privacy and centralization issues than traditional retail investors, may not want to trust Robinhood with their assets. Following an 800% spike in DOGE’s value in January, Robinhood put a temporary halt on instant deposits for crypto purchases, meaning that users could only buy the assets with funds already deposited in their accounts.
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