Robinhood Introduces Crypto Wallet, Perhaps too Late
Robinhood is the app of choice for many traders in the US, where it predominantly operates. However, scandal after scandal has distanced traders from the application, making it struggle. The first significant issue came when a young Robinhood trader died to suicide because of poorly-presented information. The service made him think he used more leverage than intended and lost more than he could afford. Robinhood promptly apologized and improved its UI, somewhat repenting for the problem it caused in traders’ eyes.
However, that’s not nearly the end, as Robinhood drew the ire of its users at the height of the Gamestop saga. Namely, the app initially forbade purchasing the stock and later limited it severely. That made traders denounce Robinhood, calling it the enemy of everyday retail traders. Public perception dropped severely, so did the stock, and earnings ever since have underperformed projections.
In its newest attempt to gain back some ground, it introduced a crypto wallet. In theory, that’d appease a good portion of its users since most newer investors have an interest in cryptocurrencies. Robinhood’s goal is to make a secure and simple crypto wallet that would lower the barrier of entry into digital currency trading. However, as it’s not as established as present cryptocurrency service providers, the feature may face lukewarm reception.
Namely, Coinbase, a much more prominent crypto service provider than Robinhood, experienced a 40% trading drop in the first three months of 2022. Robinhood, already out of traders’ good graces, is likely to follow the same trajectory as far as crypto trading goes. Retail investors are also trading less frequently and leaving the app, with a projected 48% volume loss since the start of the year. In its current state, it seems like Robinhood will be on a steady but certain decline for an indeterminate period.
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