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The Wallet That Could Deliver A Wall Street Recovery: Robinhood Pins Hopes on Crypto Wallet As Waiting List Swells

The Wallet That Could Deliver A Wall Street Recovery: Robinhood Pins Hopes on Crypto Wallet As Waiting List Swells
Written by publisher team

To say 2021 has been a busy year for Robinhood is an understatement. Online brokerage experienced a period of rapid growth in the wake of the brief GameStop squeeze in January, debuted on Nasdaq in July, and had time to draw criticism from Wall Street’s leading Warren Buffett and Charlie Munger in the meantime. However, after months of falling stock values, the market leading investment app is pinning its hopes on its new cryptocurrency portfolio to drive a market recovery.

Robinhood Crypto Wallets promise to allow users to easily transfer their cryptocurrency in and out of their Robinhood app, while seamlessly sending their assets to other wallets and benefit from transfers for purchases or other transactions.

It is hoped that enticing clients to combine their coins via a single account will ensure Robinhood continues to grow its pool of crypto investors – a market the company relies heavily on.

The importance of cryptocurrency wallet access cannot be underestimated. Despite the initial price hike, Robinhood’s shares took a hit in the months following its summer listing.

It is important to note that not all of the stock’s recent dips are Robinhood’s fault. HOOD has found itself a victim of a selloff in tech stocks in the wake of high inflation and threats to the Pay-to-Demand business model being used by Robinhood by the SEC.

One of the driving forces behind Robinhood’s devaluation stems from disappointing third-quarter financial results.

“Robinhood reported lower-than-expected third-quarter revenue and expects the income slowdown to continue into the fourth quarter,” explained Maxim Manturov, Head of Investment Research at Freedom Finance Europe.

In the fourth quarter, the company’s management gave a revenue forecast of $325 million versus market expectations of $489.21 million. Revenue was hit hard by a $233 million drop in cryptocurrency transaction revenue in the second quarter, compared to $51 million in the third quarter. Manturov added that Robinhood’s share price pressure may also be affected by the opening of 62 million shares on October 27 and 49 million on November 10.”

Robinhood’s Dependence on Cryptocurrency

As the company prepares to go public in the summer, Robinhood’s S-1 filing with the Securities and Exchange Commission revealed that the platform was heavily based on cryptocurrencies, specifically the meme-token, Dogecoin.

“A large part of the recent growth in our net income earned from cryptocurrency transactions is attributable to transactions in Dogecoin (CRYPTO: DOGE)Male deposit. “If the demand for Dogecoin transactions decreases and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations may be adversely affected.”

Crypto Traders

(picture: Robinhood Engineering)

At the beginning of the year, Robinhood announced that the company welcomed an average of 3 million new cryptocurrency traders each month in January and February. During the first quarter of 2021, 17% of the company’s total revenue came from fees charged for cryptocurrency trading, while 34% of that revenue came specifically from DOGE.


(picture: Queen Gekko)

However, despite the sharp first half of 2021, Dogecoin has already regained its upward trajectory, with trading volumes affected as a result. With this in mind, it is perhaps not surprising that the platform has struggled to live up to the optimism it was in the early stages of the year.

New Hope for Robinhood Crypto Investors

It is worth noting that the announcement of Robinhood’s new cryptocurrency wallet was very well received by users of the app. After Robinhood announced that a crypto wallet was on the way in late September, by early November, as many as 1.6 million customers had signed up to queue the platform to be among the first users to try out the new wallet.

While the release date for the Robinhood cryptocurrency wallet is currently unknown, it is widely expected to become publicly available in the first half of 2022 – with those who have signed up for the wallet’s waiting list being able to access new updates about the release timeframe. the product.

Furthermore, Robinhood has introduced a referral scheme to the crypto wallet queue, allowing users to invite friends to the platform to rise up the list and get early access. When the contact joins the app and links their bank account, the referring user moves to the middle of the queue.

This could be a very attractive incentive for app users as the wallet is currently being trialled among a small group of users, with more to be added to the queue before launch.

While the prospect of a dedicated cryptocurrency wallet seems very attractive to Robinhood’s user base, whether the addition will be enough to steer the company out of its turbulent start to life on Wall Street remains to be seen.

However, for a company that has been relying on providing access to the cryptocurrency market, the issuance of a cryptocurrency wallet represents a major stepping stone in introducing more financial tools across the ecosystem.

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