Robinhood recently announced the rollout of its crypto wallet. The wallet was first available to a small test group, followed by the rest of its users thereafter.
What is a crypto wallet?
Just like regular wallets store money – whether physical cash or credit and debit cards – crypto wallets are where you store your cryptocurrency.
They make it possible to spend crypto like normal types of money and to buy things like NFTs.
Can’t you buy crypto on Robinhood already?
You can buy some cryptocurrencies, like bitcoin and ethereum, but you don’t actually them.
When you buy cryptocurrency on Robinhood, the company buys it and then stores it in its own wallet.
This means users can’t transfer it out of the app to spend it on whatever they want at places that take it.
The true crypto people have complained that this defeats the entire purpose of cryptocurrency.
At the same time, this is also true of stocks. When you buy a stock through your broker, you don’t actually own it. It’s in the broker’s name. You can get ownership in your name, but it’s expensive to do this.
Crypto wallets and the big picture for Robinhood
In its latest earnings report, the company said cryptocurrency made up over half of its transaction-based quarterly revenue. Crypto is very popular among retail investors.
While there are still some limitations to Robinhood’s crypto wallet, the firm is bringing in those interested in cryptocurrency into overall ecosystem.
Then Robinhood can get you interested in stocks, and other products that may be helpful for you or may exist in the future. This includes debit cards, savings accounts, checking accounts, loans, and other products and services that may exist in the future.
With payment for order flow (PFOF) hanging in the balance as a risky revenue source, Robinhood will continue to diversify its revenue streams.