Robinhood Wants To Integrate Crypto Wallets

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If you have traded crypto assets on Robinhood, you probably already know that those aren't really crypto assets. There are only limited amount crypto assets or currencies like bitcoin, litecoin, ethereum, dogecoin, and bitcoin cash available to be traded on Robinhood. When those are bought on Robinhood, they cannot be transferred to any external wallets. Hence, these crypto coins bought there are merely the representation of them or their value.

For this reason many in the crypto world pointed out on Twitter or other platforms that if you bought bitcoin on Robinhood it is not really bitcoin. One of the best if not the best features of bitcoin and other currencies that they come with wallets that people can have full ownership of without a need to trust any third parties.

Now Robinhood is working on intergrading wallets to the crypto assets purchased on their platform with a goal to provide its users an ability to send coins to other wallets and receive coins from external wallets. I just received an invitation to join their waitlist and here is what they say:

Starting today, you can join the crypto wallets waitlist. With wallets, you’ll be able to send your coins to your other crypto wallets and receive supported cryptocurrencies into your Robinhood Crypto account. Be one of the first to get access!

That is great. Robinhood has ruined its reputation as of late by its actions that benefited the rich and made its users lose money during GameStop - WallStreetBets saga. Perhaps, they can find reinvent themselves going forward, fix the mistakes of the past, and embrace their original idea of democratizing trading and investing.

If/when they can successfully intergrade crypto wallets and give the ability for users to deposit coins from external wallets and send coins out to external wallets, I think this can be huge. Since Robinhood maintains zero trading fees, and if they can continue that with crypto wallets integration, this may create a competition in the space and make other services like Coinbase to consider lowering their fees and maybe also go zero fee model.

I don't know how this will work out in the end. But it is a positive step forward. When Robinhood added options trading, initially they had waitlist as well before opening this feature for everybody.

As they are working on this new feature, they are trying to gameify the process in order to increase their userbase. By joining the waitlist users will secure a spot. But then if these users invite friends to Robinhood they can move up the list.

Invite friends and move up the list. Jump the list by half for every friend that you successfully invite to Robinhood.

Take a look behind the scenes. A handful of Robinhood customers will get an early peek at what we’re building.

Interesting strategy.

One of the benefits of trading crypto on Robinhood is they make it easy to produce reports at the end of the year for tax purposes. Keeping all trades within the same platform can be simpler to calculate taxes when that time comes. Sending coins out of the wallet or receiving coins from external accounts into the Robinhood wallet, may make calculating tax obligations. I am not sure. But this is something to consider when using this feature. They probably work out some easy to follow guides for this as well. It is a win for crypto regardless.

Another benefit of wallet integration can be airdrops. I don't know if Robinhood would support airdrops for supported coins. They may need to figure that out too, since many major crypto exchanges do. Even if they don't users will have an option of moving their coins to wallets that would support airdrops.

Let me know what you think in the comments. Can Robinhood redeem itself by integrating crypto wallets and win back the users they have lost due to the past mistakes? Is such new feature good for crypto?

Posted Using LeoFinance Beta



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21 comments
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This is good news for crypto adoption and other companies will hopefully follow this example.

Posted Using LeoFinance Beta

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Yes, it will be interesting to see the competition going.

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Huh... it is weird to "own" cryptocurrency and not be able to actually use it! That seems to go against everything it was designed to do!

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True. But not everybody uses their crypto as they were intended. Some people just like to trade or buy and hold. It’s always nice to have full features of crypto available.

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I guess, that would make it more like stocks and shares in that case.

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Trust is one of those things that you never want to lose. Because when it's lost, people will never give it back. I think Robinhood did serious damage during the WSB shenanigans earlier this year, and this is an attempt to recoup some of their losses.

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Yes you are right. Maybe those who left won’t come back, but they can still get new users. Sometimes people also use exchanges and services they don’t like just because they get a better deal.

Consider you need to sell 1 btc to usd, exchanges like coinbase will have some significant fees. If there is an option to sell for zero fee, even if you don’t like particular company you may want to save on fees.

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Actually I think it was kind of logical since Robinhood's crypto trading profits exceed their stock profits. So despite people leaving Robinhood due to their past mistakes, I still think it is a good feature and it's something all of the stock brokers that also add in crypto features should add.

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I didn’t know they made more profits on crypto trades. Is there a source for this info. They only have few cryptocurrencies listed and many stocks.

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I saw it in the news. I couldn't find the exact clip I saw it in but it was mentioned in this one as well. It's about the revenue from transactions.

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thats going to be interesting to see if their users would pull their funds into non custodial services I mean they are the biggest holders of shitcoins like doge and I don't see many of their clients giving a shit about self custody

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Don’t most people keep their crypto in exchanges anyway?

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It's an interesting story and likely good for crypto adoption.

While I acknowledge I have a bias, I can't imagine taking Robinhood seriously, but others will!

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This can be big, if they deliver. The more options the better.

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It looks like a good move, but... Will it be enough to erase the "stain" they have because of some controversies?

Let's see what's gonna happen next year.

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I think it will depend on how it will work. Key part will be keeping transfers fee-less. This can create problem for exchanges like Coinbase.

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This is interesting. It is a game changer. I will be following you more closely. I feel like you give the best, most succinct, practical daily crypto advice a girl needs.

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That’s good...
Many companies just offer you to buy without the right to withdraw, so basically you don’t own crypto ;)
As a new comers are coming without any clue that is crypto and how it works.
My best project so far is #hive...
Own my key own my finances...
Nothing better than that so far...

Namaste 🙏

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