On Friday, Robinhood made its cryptocurrency (A Robinhood Crypto wallet ) available to 2 million customers who had been waiting for it, in a long-awaited step that might have significant ramifications for the emerging cryptocurrency industry. It does, however, come with significant limits.
For over three years, the Robinhood app has provided cryptocurrency trading. Cryptocurrency contributed $48 million to the company’s fourth-quarter sales last year.
Although still in beta, the new wallet, which is scheduled to go live in September 2021, will allow users to interact directly with cryptocurrency, including the ability to tip content creators on social media with virtual currency and scan a QR code in order to send cryptocurrency to another wallet.
Individuals may send up to $5,000 in cryptocurrency or make a total of 10 transactions in a 24-hour period, according to the website’s information. Robinhood does not charge any fees, in contrast to Coinbase, which charges a 1 percent fee to convert cryptocurrency to cash for withdrawal purposes.
Some would argue, that with those limitations and any limitations imposed, what Robinhood released is not a crypto wallet.
While the broad deployment seems to be a significant step forward for Robinhood, consumers are discovering the several limitations that come with the crypto wallet launch.
Unfortunately, the wallet is only capable of holding NFTs and crypto that is presently traded on the Robinhood app. ERC-20 tokens, in particular, are not allowed to be stored in the wallet, requiring users to consider other options for storing their crypto assets. Tether, Binance Coin, and Solana are among the cryptocurrencies that aren’t supported, whereas major currencies like Bitcoin, Bitcoin Cash, Ethereum, and Ethereum Classic are.
“Make sure you only send the coins stated above to your Robinhood account—any unsupported coins will be lost, and the transactions are irrevocable,” the firm website warns.
Users Want To Move Assets To Their Private Wallets
Users would have had to accept that assets acquired on Robinhood before to the company’s introduction of the wallet would be “trapped,” with no way to transfer them out of Robinhood and into a private wallet.Users took to Reddit to announce that they will be shifting their money to private wallets and to provide any ideas and advice on trading existing assets for fiat.
According to a Robinhood spokesman, the connection between Robinhood wallets and the broader crypto ecosystem is beneficial to the industry, and the outflow of funds is not a source of worry.
“We aim to provide the finest trading and investment experience in the business, and we believe that by doing so, we will be able to attract more clients and money to the crypto space.” “Increasing client investment account flows into the crypto ecosystem is wonderful news for the whole crypto business,” they stated.
Given that Robinhood originated as a stock brokerage focused on the conventional stock market, it remains to be seen if the trading app will continue to draw additional users to its platform now that it has released a crypto wallet.