Robinhood Restricts Crypto Trades Due to DOGE Rally

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In Brief
  • Robinhood has restricted crypto trading on the premise of overwhelming market conditions.

  • A similar occurrence followed this development with Gamestop and some other stocks this week.

  • The accelerated price increase of DOGE played a significant role in the high trading volatility leading to this event.

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Robinhood has stopped trading activities for its cryptocurrency users. This action was due to the sudden spike in the prices of DOGE and BTC.

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An Overheating Market

The DOGE price leap caught more than just attention on Robinhood. Crypto traders began complaining about their inability to access the app shortly after the sudden rise. The platform disabled deposits, only allowing its users to buy cryptocurrencies with already existing funds.

 According to a CNBC report, Robinhood said that it had put this restriction on due to the sudden increase in market volatility. A spokesperson from the company explained:

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“Due to extraordinary market conditions, we’ve temporarily turned off Instant buying power for crypto … Customers can still use settled funds to buy crypto. We’ll keep monitoring market conditions and communicating with our customers.”

A similar occurrence had caused the investment platform to suspend the trading of Gamestop. Other stocks affected then were Nokia (NOK) and AMC Entertainment (AMC). This development roused market participants who took to social media to complain.

Dogecoin To The Moon

Robinhood made this decision following the sudden rally in the DOGE price, which rose more than 800% on Friday. The meme coin has developed a trend of making sudden spikes after a long period of dormancy.

In addition, the founder of Tesla, Elon Musk, has been known for contributing to this price increment. On Thursday, he made a post on Twitter showing the front cover of a magazine of “Dogue”. This triggered market participants to create buy pressure, which led to the rally.

A daily chart from Tradingview reveals that dogecoin’s price has been without traction since the last quarter of 2020. However, Dogecoin suddenly hurtled from less than $0.01 to above the $0.07 price level.

This Friday price increase is not the first the meme coin has recorded this year, though. A rise was also seen on Jan. 2, when DOGE made an upswing from $0.004. This rally surpassed 1 cent before lurching again.

The cryptocurrency, which was created initially for fun, has managed to gain traction from the market intermittently.

On the other hand, the price of Bitcoin also made a significant rise, following a change in Musk’s Twitter bio to #bitcoin.

Musk’s attention towards cryptocurrencies appears to be taken very seriously by his followers. Another crypto Twitter influencer followed the footsteps of Tesla’s CEO as he did the same.

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Alo Kingsley is a content writer with 4+ years of experience in writing within the blockchain and cryptocurrency niche. He first discovered Bitcoin in 2016 and has been passionate since then about various ways Blockchain can help Africa and the world at large. He aims to give the crypto space a more geographically balanced narrative as it evolves.

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