On Friday, Robinhood released its cryptocurrency wallet to 2 million waitlisted users, in a long-anticipated move that could have huge implications for the new crypto sector. However, it comes with serious limitations.
The Robinhood app has offered crypto trading for around three years. Last year’s fourth-quarter revenue of $48 million was generated from crypto.
However, the new wallet, whose beta went live in September 2021, allows users to interact directly with crypto, offering the opportunity to tip creators on social media with virtual currency, and scan a QR code to send crypto to another wallet.
Individuals can send up to $5,000 worth of crypto or make 10 transfers total in a 24-hour period, according to the website. Unlike Coinbase, which charges a 1% fee to convert crypto to fiat for withdrawal, Robinhood does not charge any fees.
NFTs prohibited
While the massive rollout seems to be a huge move for Robinhood, users are coming to find out about the many restrictions that came along with the crypto wallet release.
Unfortunately, the wallet cannot hold any NFTs nor can it hold crypto other than those currently traded on the Robinhood app. Specifically, ERC-20 tokens are prohibited from being held in the wallet, forcing users to think about alternative avenues to hold their crypto assets.
Other unsupported cryptocurrencies include Tether, Binance Coin, and Solana, while more popular currencies like Bitcoin, Bitcoin Cash, Ethereum, and Ethereum Classic are supported.
“Make sure you only transfer the coins listed above—any unsupported coins sent to your Robinhood account may be lost and the transactions are irreversible,” the company website states.
Users look to move assets to private wallets
For those assets purchased on Robinhood prior to the company introducing the wallet, users would have had to accept that those assets would be “stuck” without having any ability to move them out of Robinhood and into a private wallet.
Taking to Reddit, users started posting to the platform, stating they would be moving their currency to private wallets, sharing any hints and tips on selling current assets for fiat.
According to a Robinhood spokesperson, the interaction between Robinhood wallets and the wider crypto ecosystem is good for the industry, and they do not see the egress of assets as a cause 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 said.
As of December, Robinhood saw 17.3 million active users on its app, due to its straightforward interface and commission-less trading advantages.
Considering the trading app began as a stock brokerage geared towards the traditional stock market, the question remains to be seen on whether Robinhood will continue to attract more users to its platform given its latest crypto wallet release.
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