“When #shiba? Ask Robinhood users hungry for dogecoin-style returns
Shiba inu is a dogecoin spin-off, itself born as a satire of a cryptocurrency frenzy in 2013, and has almost no practical use. Still, its price soared 1000% this month, overtaking dogecoin to become the eighth largest cryptocurrency in the world with a market cap of $ 42 billion.
The mind-blowing currency rally prompted Robinhood users to demand a share of the action.
Question # 1 on Robinhood’s Say Technology platform, which collects questions from retail investors ahead of the brokerage’s earnings call earlier this week, asked when it would add new coins such as shiba inu.
Separately, an online petition asking Robinhood to list shiba inu has nearly 400,000 signatures, while #SHIB was all the rage on Twitter with a barrage of “When #shiba” tweets targeting Robinhood.
Investors can buy shiba inu on some cryptocurrency trading platforms, such as Coinbase. Being able to trade it on Robinhood, which typically has lower fees than its competitors, would allow company users to switch crypto, stocks, and options on a single platform.
The brokerage said this week that it plans to wait for more regulatory clarity regarding any new digital currencies it may list.
Regulators around the world have cracked down on the growing cryptocurrency market, including the United States Securities and Exchange Commission, which has said it is looking at several aspects of digital currencies, including the offering and selling of cryptographic tokens.
Robinhood currently lists seven cryptocurrencies, including dogecoin, which accounted for 62% of its cryptocurrency trading volume in the second quarter, boosting its results.
Listing the trendy shiba inu coin could lead to a similar volume spike, but meeting customer demands for crypto can come with its own set of risks.
If investors continue to look for new coins with the prospect of faster returns, crypto platforms will need to stay on their toes to keep their customers happy, said Mati Greenspan, CEO of Crypto Consulting and Analysis at Quantum Capital.
“For an exchange that could mean… loosening their path to acceptance by reducing due diligence and eventually they could end up accidentally listing unnecessary parts or even scams,” he said.
At the same time, as a brokerage house, “you never want to be the last (…)” So there is kind of a pool game between these exchanges as a result. “
“Brokers will always chase trends when it comes to facilitating market access regardless of the flavor of the month… for the sake of their short-term profitability,” he said.
Robinhood’s revenue from cryptocurrency trading has grown 860% over the past year as retail investor interest in cryptocurrencies has exploded, bringing the brokerage to millions of new clients.
But that revenue plunged 78% from the second quarter, the company said earlier this week, far more than the roughly 35% drop in industry-wide crypto transaction volumes.
Robinhood shares fell this week after the retail broker reported lower-than-expected earnings.
Robinhood, which was founded in 2013 with a commission-free model that has become the industry standard, gained popularity during COVID-19 lockdowns, when sports and most other forms of entertainment were put on hold. and trading in so-called meme stocks has become a national pastime among young investors.
Robinhood recently announced that it will be launching crypto wallets early next year, which allow its users to transfer cryptocurrencies to and from their Robinhood accounts, and said on Tuesday that more than one million people are ‘were registered with the service. Unless the price of dogecoin rises again and in the absence of the list of new coins, a successful launch of crypto wallets is essential for Robinhood’s crypto income to return to roughly second quarter levels. Piper Sandler’s O’Neill said.
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