Designating a large number of new crypto traders this year, Robinhood says he is prioritizing growing his crypto offering. Not only is it hiring and investing heavily in its cryptocurrency offering, it also plans to launch a wallet with deposit and withdrawal features.
Robinhood CEO and co-founder Vlad Tenev spent more than half of the online broker’s first fireside chat on YouTube talking about cryptocurrency. He said that in the first month and a half of this year, more than 6 million customers traded cryptos for the first time.
Tenev promised the company would launch a portfolio with deposits and withdrawals “as quickly as possible”. There is a caveat though. Robinhood’s top priorities are to ensure the service scales while handling the exponential growth in crypto and to ensure high level customer support.
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What is a cryptocurrency wallet?
If you are new to crypto, you might be wondering why you would need a wallet for virtual currency. The main thing to understand is that your wallet helps you manage the keys to your cryptocurrency. Keys are a fundamental part of cryptocurrency – when you own crypto, you have public and private keys that allow you to access your assets. A popular mantra in the crypto community is: “Not your keys, not your coins.”
The idea is that if you don’t have full control over your keys, someone might take your coins. For example, your account could be hacked or frozen. Currently, Robinhood customers can use the platform to buy, sell, and store crypto. But they cannot move currencies from its platform to their own wallets. This is why some people have a problem with Robinhood’s platform – it manages your keys for you. Its new crypto wallet would allow you to take back that control.
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Many enthusiasts store the majority of their crypto in what is called a cold wallet, which is offline and therefore more secure. You can also put the currency you want to access more often in an online or hot wallet. Either way, you choose how and where to store your crypto.
How does Robinhood’s crypto offer look?
Robinhood’s mission is to democratize investment. It pioneered commission-free trading and continues to offer low fees. He was among the first online brokers to offer fractional shares. With 17 cryptocurrencies, it is also one of the best crypto exchanges.
With its roots as an online stock broker, Robinhood differs from exchanges like Coinbase which only trade cryptocurrencies. Tenev would like to stress that Robinhood is a profitable way to trade. “We want to make sure you’re getting the most crypto for your money,” he said. “We want to compete on price.”
He also addressed the criticism the company has faced following its decision to temporarily halt trading at GameStop (NYSE: GME) in January. Robinhood was inundated with negative reviews as users expressed frustration with the trading halt. The brokerage has justified its decision, but the backlash has not yet completely dissipated.
“We are working hard to dispel the false narratives,” he said. “But the main thing is to let the products speak for themselves and keep improving the product.”
Tenev explained the idea behind launching Robinhood’s initial crypto product without a wallet. “We felt there was a product offering that appealed to people who didn’t want to manage their own keys,” he said.
The new wallet feature – which is next on Tenev’s priority list – would allow users to move those assets to other wallets. “As much as people bother me about this on social media, so much I bother our crypto team and our software engineers,” he said. The CEO added that online brokerage could also add more coins along the way.
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