Online trading app Robinhood Markets, Inc. (HOOD) has begun rolling out cryptocurrency wallets to 1,000 customers as part of a beta test. In March, the rollout is expected to expand to 10,000 customers.
The beta testers are drawn from a waitlist of over 1 million individuals. They will have a daily withdrawal limit of $2,999 and will be limited to 10 transactions in a day.
- Robinhood is rolling out 1,000 crypto wallets to users as part of a beta test.
- The trading app’s move to add the functionality comes at a time of churn in cryptocurrency markets, when prices for major coins have fallen by nearly 50%.
- Analysts say that the addition of crypto wallets could bolster numbers for new sign-ups on Robinhood’s platform.
As part of the rollout, Robinhood plans to test new crypto-related functionality on its app, including finalizing the send and receive flows for wallets, introducing QR scanning to simplify the flow, and adding explorer functionality that provides critical statistics and transaction information related to various crypto blockchains at a glance.
“Beta testers will help us test core functionality and provide critical feedback to inform the final version of the product,” Vlad Tenev, chief executive officer at Robinhood, stated in a post on the company’s website.
Riding the Crypto Wave
Robinhood’s beta test for crypto wallets occurs at a time of changing fortunes for cryptocurrencies. They thrived during the pandemic’s risky environment, scaling to new highs when investors were flush with stimulus money and interest rates were nearly zero. Robinhood itself nearly doubled the number of accounts on its platform and reported record revenues due to “huge interest in crypto,” according to CEO Tenev.
But 2022 started off with a slump in crypto markets. Weighed down by a broader market sell-off for risky assets and the prospect of interest rate hikes by the Federal Reserve, prices for major coins are off by nearly 50% from their highs last year.
Bitcoin (BTC), the world’s most popular cryptocurrency, is trading at $36,934.45 as of this writing, down from its high of $67,566.83 notched in November of last year based on data sourced from coinmarketcap.com. Ether (ETH), the world’s second most traded cryptocurrency, is down from its high of $4,735.07 last November to $2,442.39 as of this writing.
The churn in crypto markets has affected account openings at various brokerages dealing with the asset class. According to BrokerChooser, an international broker comparison site, the number of account openings at brokerages dropped by 73% on average during the third quarter of 2021 as compared to the year’s peak first quarter. Robinhood had 88% fewer account openings in the third quarter of 2021, said Adam Nasli, head analyst at the site. According to him, the introduction of crypto wallets on Robinhood’s platform could close the gap between the app and cryptocurrency exchanges, which account for the bulk of trading in crypto markets.
“As crypto wallets are really important for customers and most U.S. brokers don’t provide it, this move [of offering crypto wallet functionality to users] can have positive impacts on account openings at Robinhood,” Nasli said.
Robinhood reported $51 million in revenues from crypto trading during the third quarter of 2021, down from $233 million in Q2 2021.