Sep 22, 2023

Robinhood recently added wallet support for bitcoin and dogecoin, increasing the breadth of its crypto wallet beyond the Ethereum ecosystem.

Video transcript

Robin Hood recently added wallet support for Bitcoin and Dogecoin increasing the breadth of its crypto wallet beyond the Ethereum ecosystem. Joining us now to discuss is the Robin Hood crypto is Robin Hood crypto General manager, Johan Cabra. Welcome John. Thank you, Lawrence. How are you? Good seeing you. Uh Gotta ask where, where are you seeing? Uh where is Robin Hood crypto headed? I mean, we, we, we, we've, we, we've had this discussion regarding Robin Hood and, and uh its involvement in crypto and, and the big argument here is that uh Robin Hood is kind of like a clo, it's almost like the AOL, the way AOL was with the internet. So Robin Hood is with crypto. It's a closed system. Uh How, how does it actually work? And where is it going? Yeah. No, II I actually think, you know, we, we've done a lot more than AOL for crypto actually, you know, robbing a crypto has probably embodied more customers into the crypto space than a lot of our competitors. Um And to your point, it's actually not a closed system. Uh We do support deposit and withdraw of Cryptocurrency for, for people that are eligible to it. So, you know, at, at this point, uh people can decide to buy and sell crypto on Robinhood. Um, and they can also decide to transfer it to their self custody wallet if they choose to and to help them with that. We did launch recently a rabbit wallet available to all our I OS customers. Um, and it's, it's been a great success, you know, it's available in 100 and 40 plus countries. We've seen 100 and 1000 of wallets created in the first six months, six months. So we are very excited by it. When I say, when I say the A O of, of crypto in a way AOL was kind of a closed system that had, uh, eventually, at first, you couldn't use the internet on it. Right. It was, if you AOL was an entirely, uh, closed system by which people could, could experience some sort of an internet, it was a dial up thing eventually allowed the internet on. But then it's sort of again, closed environment, uh, in, in some of the same ways. That's sort of what the discussion has been with, with Robin Hood, right? Is that ultimately it isn't your keys. It isn't your crypto. If you buy crypto on Robinhood, it's you, it's basically you're taking on a price. Is that correct? No, we, we do. So when the customer plays an, not on Robin and Crypto, um, we place the order on the on their behalf. And as soon as we take, uh, the, the, the, the Cryptocurrency, as soon as we receive it, we store it in our custody that we do control at Robin. Um, we are a safety first company. So most of the crypto is stored in cod storage and um, we have a small amount in hot storage for, for operation. Um, customers can withdraw at any point if they're eligible to it. Um And they can send it to their own self custody wallet. So everything that you buy or sell on crypto is uh the the real asset. It's not just an exposure. Jon I got to talk to you about users Robin Hood market. Second quarter earnings showed that monthly active users fell to 10.8 million, which was 1 million less than the quarter before. Um Were these talk to me about crypto user demand? How many of these users came from the crypto side of your offering? Yeah, you know, for, for us, we don't really look necessarily at all these cycles. Um If you actually look at when Robert crypto was launched, it was back in 2018 in, in the very beginning of 2018. And so that was the past winter for crypto. Um And so we've actually, you know, we strongly believe that Robert and crypto that we think that crypto is going to be the financial framework of tomorrow. Um And we are using this time where the activity is a bit slower to actually build for, for tomorrow. Um A lot of the time that we spend, um you know, during the day, two days to talk to our customers and understand their pain point. And we think crypto is not yet accessible to everybody. And so that's what we've been focusing on is removing the barrier of your entry to the crypto space. What's the most popular crypto on the app? Um It really depends on the time of the, of the day. You can see no disclosure or like some of our assets that are the most held our Bitcoin and, and Dodge. Um But, you know, depending on what's going on in the, in the market, depending on what other s that are successful. If, um, you know, there are NFTS popular, uh drugs or things like this, we see things changing quite a bit. You know, we, we, we talk about the fed, raising rates and, and uh having a tighter monetary policy. Uh, it, it Robin Hood in many ways as, as is popularly known, uh grew in a period of easy money. Uh This is not a period of easy money. Now, this is a period of uh tighter monetary policy and it seems that that's what the rest of the world is waking up, is woken up to. Is that the fed might really mean it this time, uh after raising rates, uh, you know, 500 basis points over the past year. So, um, how, how is does Robin Hood and Robin Hood crypto specifically adjust its business for a higher rate world where, uh, funds aren't flowing into people's pockets. There are no more stimmy checks if you will, uh, into their, into their accounts. Um, and the, the hurdle rates are much higher now to, to, to cross when, when you are trading. Yeah, we've been focusing a lot on usability. I think one part that we've been trying to see with our customer is how do they want to use the crypto that they purchase? And when we've talked to them, a lot of them wanting to get into the web free space, they want to get into gaming, they want to be able to and FTS. Um but we are just getting frustrated by the, the 567 steps that are required before you can do that. So at Robin and we've been trying to reduce a lot of this, um you know, steps and we are trying also to reduce pricing. Um I think a lot of this issue that we are seeing um in the crypto world is that every middle man or middle uh you know, company is trying to get a cut or trying to get a fee. And so for, for us, this has been something that was very frustrating. We, we've been wanting at Robin to break the barrier to entry. It means that we need to reduce pricing. Um And so that's been something that we've been focusing on in the past 6 to 9 months. And during this time when we were looking at it, we saw a lot of our competitor actually increasing their pricing. Um And so we actually engage um experts to, to check our, our price. And we uh we now have like uh an audit showing that we actually offer the best pricing between um crypto and multiple companies. Iii I guess my question is this is not so much about pricing, but the, the mentality of the traders have changed because now day trading is expensive. If you are a day trader, it's not just about the transaction fees anymore, but it's about your borrowing costs. Your borrowing cost went up if you're, if you're, you know, God forbid, of course, we can't say that people do this, but they go and they, they maybe, you know, take AAA cash advance on their credit cards or whatever that those days are over because their, their cost of borrowing have gone up tremendously. How does Robin Hood and Robin Hood crypto specifically change their business plan, their outlook, uh what they offer customers in a world where people might not be so willing to day trade as much as they are uh in investing in the long term. Yes, of course. And, and I think that's where, you know, we've seen Robin evolving initially, you know, maybe 10 years ago, we were just purely about equities trading, but since then, Rob has evolved into a complete suite of financial tools. Um So if you looked about it, we have a high yield saving account. If you're a gold customer, we also launched recently retirement accounts. Um and we are actually the only place where you can get a percent match when you deposit uh into your retirement account. And we think this is important. We want to be the, the place where you're going to have all your financial needs answered no matter of the environment if it's a high yield environment or although one we, we want to be there. All right, Johan, we are going to have to leave it there. Thanks so much for joining the show this morning. Thanks for having me. That was Robin Hood crypto General Manager Johan Krat.

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