Robinhood’s cryptocurrency wallet, which allows users to spend and trade select digital currencies, including Bitcoin and Ethereum, will be made available to “all eligible customers” on its waitlist, the company has announced. That’s over two million people, although the company warns the wallet won’t be available in Hawaii, Nevada or New York due to “local regulations.” The wallet was initially launched last year as a limited test.
Although Robinhood has allowed customers to buy cryptocurrency on its platform, you couldn’t just spend the cryptocurrency – it simply stays in your account as a speculative asset until you decide to sell it. In contrast, Robinhood says its wallet gives customers “full access to their crypto” and the ability to “participate in the crypto ecosystem — by tipping on social media, paying for NFTs, and more” with no withdrawal fees.
Promising “full access” to crypto
Best known as a stock trading platform, Robinhood played a big part in last year’s meme stock frenzy, but says buying cryptocurrencies is becoming increasingly popular among its users. “Bitcoin is actually the most recurring purchase for our customers, even more than many of the stocks you think of,” said Aparna Chennapragada, the company’s chief product officer, onstage at the Bitcoin 2022 conference in Miami. However, Bloomberg notes that its earnings from cryptocurrency transactions have been volatile, falling 79 percent between the second and fourth quarters of last year.
Its cryptocurrency wallet supports QR codes for sending crypto and includes address validation and mandatory two-factor authentication for security. But unlike some other wallets, Robinhood’s is escrow, meaning the company is ultimately responsible for the keys that can unlock it. Many critics dismiss the idea that end users don’t have complete control over their private keys, but depot wallets are helpful for anyone worried about losing access to their funds by misplacing their credentials.
There are also other limitations to the functionality of the Robinhood crypto wallet that are worth being aware of. A company FAQ clarifies that sending an NFT to a Robinhood address can result in it being lost, and as of last September, the company announced that it would not allow customers to buy shares directly with cryptocurrency.
In addition to launching its wallet for people on the waitlist, Robinhood has also announced that it will be adding support for the Bitcoin Lightning Network “in the near future.” If rolled out, it should offer customers a faster and cheaper way to transfer Bitcoin by having those transfers happen “off-chain.”