Robinhood’s new crypto wallet feature sends the stock price up 17.5%

robinhood, stock, Hood wallet
image from robinhood.com

Key Takeaways:

  • Robinhood develops a crypto wallet, that will roll out in a month.
  • The freshly public stock price went up to 17.5% in response.

YEREVAN (CoinChapter.com) – Robinhood, the California-based financial services company, saw its stock price rocket to $46.8 per share (a 17.5% uptrend since Sep. 20) after announcing the plans to launch a crypto wallet feature that will enable the users to trade, send and receive cryptocurrencies without leaving the platform.

The company announced that the testing for the wallet is ongoing. But the result will roll out in approximately a month. Robinhood users already have the opportunity to buy and sell certain cryptocurrencies. However, they were unable to send their coins to other wallets or use them outside the platform in any other way.

Thus the new feature will allow Robinhood to submerge deeper into the cryptocurrency pool.

Robinhood and crypto; a lasting collaboration?

Robinhood is a zero-commission stock brokerage that dipped its toes into the crypto market fairly recently (2018, 5 years after founding). However, the increased attention to the crypto sector proved to be fruitful for the company. In the second quarter of 2021, digital asset offerings brought in the lion’s share of its transaction revenue (51%).

In detail, the total crypto-generated revenue grew from $5 million in Q2 2020 to $233 in Q2 2021, outshining core options and equity trading. According to the report, over 60% of all Robinhood users held crypto assets on the platform.

Considering the profitability of the collaboration for the stock brokerage, a further dive into the digital asset trading domain is understandable.

However, there is a flip side to the coin. By deeper affiliation with the crypto market, Robinhood might make itself vulnerable to the accompanying volatility. In addition, the company focuses on retail traders rather than institutional investors, which increases the risk.

There are not yet observable patterns on the Robinhood stock (HOOD) chart regarding the dependency on the overall crypto-climate. Nonetheless, HOOD stock price responded positively to the news and jumped 17.5% since the announcement day.

Also read: Dogecoin trading made 62% of total Robinhood earnings in Q2/2021

HOOD stock on the rise

As mentioned, the data on HOOD stock is not extensive, as the company went public on July 29, 2021. So the upcoming Q3 and four results will shed much light on the effects of the crypto market on Robinhood. At the time of writing, the stock price stood at 46.8 in the European session Thursday.

Robinhood stock price jumped 20% on the crypto wallet news. Source: HOOD on TradingView.com
Robinhood’s stock price jumped 17.5% on the crypto wallet news. Source: HOOD on TradingView.com

There is an additional factor that could have influenced the HOOD price during the past few days. After a two-month break, Robinhood is back in the IPO game (initial public offering).

The online broker does not require a minimum account balance to participate. As a part of its narrative of “democratizing” the stock market, any Robinhood user can try their luck. However, the share-awarding algorithm picks at random. Thus, some users don’t get a slice of the pie.

Also read: US law enforcement targets crypto exchanges in and out of the country; Suex sanctioned

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