Shiba Inu in Robinhood! Will it Now Lead the Crypto Race in 2022?
Shiba Inu, SOL, Polygon’s MATIC, and Compound’s COMP tokens were added to the Robinhood crypto platform, and here’s the impact.
Four popular cryptocurrencies, including the tokens of Shiba Inu and Solana, have been listed on the trading platform Robinhood. A blog post on Robinhood’s website later confirmed the offerings. SHIB, SOL, Polygon’s MATIC, and Compound’s COMP tokens were added to Robinhood Crypto, the platform’s crypto-focused trading platform. SHIB prices surged some 7% since then, data from CoinGecko shows. It is the second meme coin to be listed on Robinhood, alongside Dogecoin’s DOGE. COMP jumped 6.6%, MATIC added 3.5% and SOL 2%. Since it is a safety-first company, the team has a rigorous framework in place to help experts evaluate assets for listing, and they remain committed to providing a safe and educational crypto platform, confirmed Robinhood’s Chief Brokerage Officer, Steve Quirk, in the company’s blog post. He added that the assets are available to buy and sell now on the Robinhood app, but deposits and withdrawals for them won’t be available immediately. The additions come after the company said last week it activated its crypto wallet for 2 million eligible customers, making digital asset transfers broadly possible in the investments app.
Speculations centered last year around potential crypto offering additions from Robinhood, though CEO Vlad Tenev had told investors the company would await regulatory clarity before doing so. Robinhood already offered seven cryptocurrencies including bitcoin (BTC), ether (ETH), and dogecoin (DOGE). Robinhood (HOOD) had experienced one of the worst global high-profile stock market debuts since the inception of the pandemic. The company’s shares have been tanking continuously, making them one of the worst market performers amongst companies that had raised US$2 billion or more on global exchanges since early 2020.
Despite its immense popularity, Robinhood’s stock has declined substantially from its IPO price. It is currently down by ~15% year-to-date. Multiple issues such as rising inflation levels, the conflict between Russia and Ukraine, and most importantly, the regulatory concerns surrounding its payment for order flow revenue model have heightened the pace of its declining growth rate. The post-COVID-19 decline in cryptocurrency growth hasn’t helped Robinhood either. Robinhood stock is extremely cheap now, and it looks like quite a lucrative investment option. However, the risk involved is still causing investors to shy away from investing in it. Robinhood Markets is a brokerage that aids in commission-free trading of stocks, exchange-traded funds, and cryptocurrencies. It also has various learning and education solutions like Robinhood Snacks, Robinhood Learn, Robinhood Newsfeed, and so on.
Robinhood rose to fame during the pandemic. The company’s user-friendly, no commission, and game-like investment application became a rage among the young and first-time investors community. Social network Reddit also had a share in raising its popularity. Reddit communities drove up the price of meme stocks like GameStop (GME), AMC Entertainment (AMC), and Bed Bath & Beyond (BBBY), further boosting Robinhood’s popularity. Despite that, the Robinhood stock continued to suffer. The controversies started when Robinhood restricted trading of certain meme stocks under an obscure financial obligation. It was required to put up billions of extra dollars to protect the extra risky trades. Many market participants accused the company of protecting hedge funds’ interests at the cost of public money. Though the accusation turned out to be false, it did hamper the company’s reputation. Again, the company’s order-flow-based revenue model, through which Robinhood was generating revenue by selling its customers’ order details, further increased people’s resentment toward the company.
Robinhood’s business model does have prospects, but the company still needs to work a lot to translate its popularity into actual success. Moreover, though the chances of its order flow-based revenue model getting an outright ban from the SEC is still bleak, the stock still involves certain levels of uncertainty. Therefore, if someone is not that risk-conscious, they can consider the Robinhood stock, as it is exceptionally cheap now and can someday even turn out to be a goldmine if it takes proper corrective steps now.
