Robinhood Releases Crypto Wallet to 2M Users, Plans Integration With Bitcoin Lightning Network
In a pair of announcements from the Bitcoin 2022 conference in Miami, the trading app flexed its crypto chops. But check the fine print.
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MIAMI — Robinhood Markets (HOOD) said Thursday it has activated its crypto wallet for 2 million “eligible” customers, making digital asset transfers broadly possible in the long-firewalled investments app.
Chief Product Officer Aparna Chennapragada made the announcement on stage at the Bitcoin 2022 conference in Miami.
Only a handful of wallet beta testers could move bitcoin (BTC), ether (ETH), dogecoin (DOGE) and a handful of other traded coins in and out of Robinhood’s walled garden before. Now, all waitlisted customers outside of regulatory no-go zones Nevada, New York and Hawaii can do so.
Additionally, she said Robinhood will add support for bitcoin transactions on the Lightning Network, the speedy, low-cost settlement layer for Bitcoin.
“For the larger community this is a fantastic way” to access bitcoin cheaply and in a green way, she said, adding that BTC is the top recurring buy on the app.
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HOOD’s crypto push
Nearly 10 million Robinhood users swapped coins early last year in one sign of the app’s crypto appeal, the company has said. Robinhood’s almost three-year-old crypto trading functionally has produced an explosion of revenue, last quarter generating $48 million for the publicly traded firm.
“Wallets are just the first step we’re taking to connect our customers to the broader crypto ecosystem,” CEO Vlad Tenev said in a press statement.
Limitations
Still, Robinhood’s multi-asset wallet falls short of true functionality. It cannot plug into Ethereum-based services as MetaMask does. It cannot accept ERC-20 tokens, non-fungible tokens (NFT) or any asset outside of Robinhood’s trading list. Tokens generated by airdrops and forks won’t work either.
“Any NFTs sent to a Robinhood Ethereum address may be lost and unrecoverable,” the FAQ page said.
Staking also appears to be off-limits for now. Tenev has previously acknowledged customers’ desire for the yield-earning feature and said during last quarter’s earnings call that Robinhood was investing in the necessary tech. A staking service would have to be “compliant,” he said.
Users won’t be charged for moving their Robinhood-based crypto into wallets that have such abilities. The company said it will apply estimated gas fees but not withdrawal fees to requested outbound transfers.
There’s a $5,000 daily cap on outbound transfers and newly acquired crypto stays put until the transaction settles, the web page said. Further, users must undergo an identity check and enable two-factor authentication to access the wallet.