- The Robinhood stocks plunge as crypto market activity decreases with more accounts leaving the platform.
- Not listing Shiba Inu could be a contributor to its net losses this quarter.
The crypto activity on Robinhood has seen a drop, consequently leading to its stock HOOD declining in value. As per the platform’s report on October 26, its stocks saw approximately a 10% plunge. Moreover, its quarterly profits also dropped from the last quarter to under $300 million. The overnight decline is closing the online marketplace’s year at a low.
At the beginning of the year, Robinhood played a significant role in boosting Gamestop and AMC trades. Furthermore, it received a lot of criticism following its delisting of Gamestop as an inconvenient product on its platform. Traders conducted a social media uprising to improve and support Gamestop and AMC’s worth.
However, Robinhood’s CEO tried to clear the platform’s name during court proceedings. Furthermore, it went ahead to apologize to its customers for its actions and terminating Gamestop’s trade on its platform.
A tough month for Robinhood
According to the platform’s report, it received over $500 million in the last quarter. In its 3rd quarter report, Robinhood expressed several factors that influenced its markets. Among them were its customers’ behaviour, unexpected events in the market, volatility, to mention but a few. It also stated that its growth curves also depend on these factors from the word go.
According to its Tuesday publishing, the platform aired that the same factors might play a part in its proceedings this quarter. However, CEO Vladimir Tenev maintains that the future is bright for Robinhood as its primary focus remains on its long-term objectives. Additionally, it wishes to expand its crypto services to attract more users to its platform while supporting the booming economy.
A couple of analysts believe that the platform might have experienced a downward curve due to its lack of introducing the Shiba Inu coin. Shiba Inu is a meme coin that has received a lot of hype lately, contributing to its continued price spikes.
Accounts leaving the platform
Contrary to earlier expectations, the platform is experiencing a decline in accounts. Previous analyses expected a boost to over 24 million accounts. However, Robinhood is dealing with over 100 000 accounts leaving the platform. This factor is a vital pain point in its net losses this quarter.
It boasted an increase of 10 million accounts in the first half of the year. It reflected in its increments to over $500 million, which registers higher than what the general US markets expected. Even with the current losses, HOOD is trading above the initial thoughts of many.
After all, it experienced a slight increase after its plunge on Tuesday and may recover if factors suit this purpose. All the same, it has to deal with its issues with the SEC, which suspects the platform is reaping off its retail traders. In a way, it might also be a reason for the current issues that Robinhood is experiencing.
Robinhood shows off Wallets Alpha with Dogecoin transfer, does Shiba Inu stand a chance
If things go right, those trading on the Robinhood platform could soon send a certain meme coin from their Robinhood wallet to an external one.
Christine (Hall) Brown, Robinhood’s Crypto COO, shared a screenshot that showed a transfer of 420.71 DOGE [$94.10 at press time], to the excitement of crypto watchers.
#WalletsAlpha update! Last week we sent our first alpha transfer from a Robinhood wallet to an external wallet.
Here is a screenshot of our test #DOGE transfer: pic.twitter.com/Bn4wQlvkwP— Christine (Hall) Brown (@christine_hall) November 22, 2021
Speaking about the Wallets Alpha program, which had specially chosen customers test the crypto wallets, Brown earlier said,
“One alpha tester expressed wanting to use wallets to potentially receive crypto as payment for their business, while another wants to use crypto instead of dollars to split bills with friends (which will be made possible by sending the dollar value amount, but in crypto).”
A happy pupper
Dogecoin creator Billy Markus was also suitably impressed by Robinhood’s update, if his tweet was anything to go by. Markus also took the opportunity to point out the relatively low DOGE fee.
For her part, Brown added,
“As this is transfer off of Robinhood, there is a network fee which is dictated by the network (this fee goes to DOGE miners who verify transactions). The fee = 0.02 DOGE (just $0.005) Transfers between Robinhood wallets/customers will not incur a network fee (or any fee).”
Well, why is the fee such a talking point? It’s important to note that the Dogecoin Core 1.14.5 version upgrade finalized the minimum recommended transaction fee, setting it at 0.01 DOGE/kb.
On a related note, the same update caused issues for the crypto exchange Binance, which stopped DOGE network withdrawals earlier in the month. In addition to this, users reported getting free DOGE from previous failed transactions – probably due to the new minimum fees.
Following a tweet from billionaire Elon Musk, Binance put out a thread explaining its technical issues. The exchange said that it was rebuilding the wallet, and that the process might take another week.
Doge holders using Binance should be protected from errors that are not their fault— Elon Musk (@elonmusk) November 23, 2021
At press time, the market was down and DOGE was finding new homes at $0.2243.
To SHIB or not to SHIB?
Whenever DOGE comes up in conversation, you can bet SHIB isn’t too far behind. However, members of the SHIB army were disappointed when reportedly, Brown made it clear that DOGE being listed on Robinhood didn’t mean free entry for SHIB.
However, crypto researcher Max Maher had earlier predicted,
“So if I were to guess, Shiba will calm down a little bit for a period, and then Robinhood will make their big announcement, and that will shoot up the price 10 to 18% in a single day, from wherever it’s sitting at that point.”
“This Is Huge”: Robinhood Is Testing Dogecoin Wallet
Robinhood has sent Dogecoin to an external wallet for the first time to test the much-anticipated feature
Christine Brown, chief operating officer at Robinhood Crypto, has offered a sneak peek at the app’s much-anticipated cryptocurrency wallet feature.
In her recent tweet, she attached a screenshot of a test Dogecoin transfer that took place last week.
It shows a 420.71 DOGE ($91.82) transaction being processed for a 0.02 DOGE ($0.0044) fee. Payments on the network of the flagship meme coin have become significantly more affordable following the much-talked-about release of Dogecoin Core 1.14.5.
Dogecoin co-founder Billy Markus said that the development was “huge” for the meme coin in a tweet while praising the coin’s cheap transaction fees.
The company announced that it was adding cryptocurrency wallets in late September to the great delight of its customers.
Earlier this month, Brown revealed that 1.6 million users had already joined the waitlist.
Robinhood executive criticizes Coinbase’s proposed regulation: “Ridiculous”
Dan Gallagher, General Counsel for Robinhood, Coinbase’s adversary, believes it’s not feasible. “It’s one of the stupidest ideas I’ve heard in this industry lately,” he told Georgetown University Financial Markets Quality conference attendees.
He said attempts to transfer authority from agencies such as the Securities and Exchange Commission (or SEC) and the Commodity Futures Trading Commission (CFTC) would likely be incomplete and would only add more people.
Coinbase’s “Digital Asset Policy Proposal”, published on October 14, presented a way to minimize the number of agencies that crypto market participants could face.
“To avoid fragmented and inconsistent regulatory oversight of these unique and competing innovations, responsibility over the cryptoactive markets must be assigned to a single federal regulator,” he said. “His authority would include a new registration process designed for digital asset markets (MDAs) and providing adequate data to inform buyers of digital assets.”
Pillar 2: Designate One Regulator for Digital Asset Markets
Responsibility should be assigned to a single federal regulator and a new registration process established for MDAs. A dedicated self-regulatory organization should also be established.
Together they set rules.— Coinbase (@coinbase) October 14, 2021
In response to Gallagher’s comments, Coinbase issued a new statement:
We welcome any discussion of how to reform a system that is not adequate when it comes to crypto. However, to be clear, our proposal never called for a new regulator: it is regulator agnostic.
It calls for crypto-focused proposals, not the use of old precedents for new technology. We welcome the debate and if others have concrete ideas, share them. There is space for everyone to contribute.
Currently, several agencies are eyeing the cryptoactive sector.
The SEC is charged with regulating securities (tradable investments in companies trying to generate profits).
In October, Gary Gensler, chairman of the SEC, declared that Coinbase had “dozens of tokens that can be securities” even if it is not licensed to operate as a stockbroker.
There is also the CFTC. In October, during his confirmation hearing, President Rostin Behnam urged the Senate to be “the chief prosecutor” for digital assets, despite his agency’s traditional mandate to regulate derivatives markets, not commodities themselves.
And a variety of other government officials are frequently involved in the industry, including the Office of Currency Control (OCC), banking regulator formerly headed by former Coinbase executive Brian Brooks, as well as the Financial Crimes Combat Network (FinCEN).
In addition, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Bank, and the OCC have joined an interagency team to coordinate crypto policies for banks.
Gallagher, who served as the SEC’s representative during the Obama administration, cited well-intentioned legislation introduced after the financial crisis between 2008 and 2009, precipitated by defaults on high-risk mortgages.
“[A Lei] Dodd-Frank started limiting the number of agencies and providing clear jurisdiction, so they got rid of one agency and added three,” he said.
“So we ended up with a balance of two [agências] more after Dodd-Frank and with even more confusion about jurisdiction. The idea of adding a new regulator is completely ridiculous.”
Gallagher was referring to the Dodd-Frank Consumer Protection and Wall Street Reform Act, which ended the Treasury Department’s Office of Oversight of Savings and Loan Associations (OTS), merging its tasks with the OCC, FDIC, and Federal Reserve and the newly created Department of Financial Consumer Protection (CFPB).
Dodd-Frank also created the Financial Stability Oversight Board (FSOC) and the Office of Financial Research (OFR).
Robinhood and Coinbase were targeted for being the two largest platforms for acquiring cryptocurrencies in the US. However, both took different steps.
Brian Armstrong, CEO of Coinbase, promised to list every legal asset, prompting the broker to quickly add dozens of new currencies and tokens this year.
In contrast, Christine Brown, chief operating officer of Robinhood Crypto insisted on a more cautious approach that limits the trading app to just seven cryptoactives.
Last week, she told Decrypt: “We want to ensure that we are working on evaluating everything very well from a regulatory perspective.”
Even if Coinbase’s plans are “ridiculous”, other people are thinking about the juggling crypto participants, as well as possible loopholes in the current environment.
In testimony to the US Congressional Board of Economic Committee this Wednesday, Tim Massad, a researcher at the Harvard Kennedy School, told lawmakers: “The CFTC can regulate bitcoin futures the same way it regulates cattle futures, but the CFTC does not regulate the purchase and sale of cows. Nobody regulates the buying and selling of bitcoin beyond the states – that’s a very light approach.”