Leading retail brokerage services provider Robinhood is diving into the world of cryptocurrencies after launching a new wallet app that allows users to custody their cryptocurrencies and non fungible tokens (NFT).
— Robinhood (@RobinhoodApp) May 17, 2022
Robinhood is looking to expand its product offering beyond equity trading as it continues to grow globally. Robinhood shares have struggled for upside momentum since going public, down 70%.
Its latest product puts it in direct competition with leading cryptocurrency exchange service provider Coibase, which recently switched to offering non-fungible tokens. Leading NFT wallet provider Metamask will also be a major rival to Robinhood’s new digital asset wallet.
Users will be able to store NFT and connect to NFT marketplaces and decentralized exchanges. Given Robinhood’s global presence in the equity trading space, its NFT and cryptocurrency custody wallet app could become one of the most popular cryptocurrency wallets on the market.
“We believe cryptocurrencies are more than just an asset class,” said Vlad Tenev, co-founder and CEO of Robinhood, in a press release. “By offering the same low cost and great design that people have come to expect from Robinhood, our web3 wallet will make it easier for everyone to hold their own keys and experience all the opportunities the open financial system has to offer.”
Coinbase’s custodial wallet is the most downloaded wallet in the United States, according to the company’s CEO, Brian Armstrong. Therefore, Robinhood’s product could experience similar success depending on adoption levels.
In addition, users will be able to earn yield through other platforms, while being able to access a “variety” of cryptoassets on other exchanges, according to the retail broker.
The issue of holding or custody of cryptoassets has become a hot topic in the blockchain space, giving rise to the phrase “not your keys, not your coins.”
The debate has intensified amid increasing security breaches that have seen thieves still more than $1.2 billion so far in 2022 by exploiting private keys. As a result, NFTs and cryptocurrency enthusiasts have become more cautious about storing their assets on exchanges.
Robinhood’s commission-free trading business made it one of the most popular brokerage services during the two years, with demand for stock trading skyrocketing during the pandemic period. However, activity has slowed significantly since then, and revenue for the quarter ended March 31, 2022 plummeted 43% from the same quarter a year earlier.
The company has been focused on adding more cryptocurrency products and features in its attempt to spark a recovery. Last month, it launched another cryptocurrency wallet that will continue to be available within the main app.