money Robinhood adds new crypto tokens to its trading platform
Robinhood ($HOOD) added trading in four new tokens earlier this week, further expanding further into the world of crypto.
The stock and crypto trading app now supports Compound (COMP), Polygon (MATIC), Solana (SOL) and the meme coin, Shiba Inu (SHIB), bringing the total number of crypto assets traded on the platform to 11, far less than what most crypto-native exchanges offer.
The additions on Tuesday follow recent efforts by the company to enhance its trading abilities and expand its crypto features. The company's shares were up 2.41% to $11.70 apiece in late morning trading Wednesday.
“You cannot fully realize the mission of democratizing finance without crypto,” Robinhood Chief Product Officer Aparna Chennapragada told Yahoo Finance at the Bitcoin 2022 conference last week.
For Robinhood traders, it’s been a long time coming for the platform to finally add SHIB. The request has come during several of the company’s past earnings calls with 559,705 advocates of the meme coin having signed a petition with the request on Change.org.
The trading app chooses to list new crypto assets based on factors including internal recommendations. Ultimately, Robinhood’s chief brokerage officer Steven Quirk told Yahoo Finance the decision is made by an asset listing committee separate from the business which considers “governance, security, financials on-chain analysis, technology and customer demand in no particular order.”
The new offerings run in tandem with the company’s efforts to improve its trading features, which has included adding 24/7 customer support in addition to announcing plans to extend stock trading hours from 7 a.m. to 8 p.m.
The scheme also follows an announcement last week from Chennapragada who said on stage at the Bitcoin 2022 conference that the company had given its long awaited crypto wallet feature to 2 million waitlisted users and planned to add the Lightning Network, a Bitcoin payment application.
Centralized exchanges serve a powerful role in crypto markets, often acting as the entry point for new investors putting their money into the asset class.
A November study from blockchain analysis firm, Chainalysis, suggests the relationship works two ways. At least during last year’s bull market, exchanges that listed a greater number of crypto assets tended to receive more money on their platform per month than the average.
However, the risk of listing newer crypto assets means weighing regulatory hurdles and investor protections associated with vouching for lesser proven coins for the sake of profit.
The outcome doesn't always make sense according to Jerry Sun, an analyst with digital asset research firm, Messari.
“In a space like crypto, it's important to separate innovative projects from the noise and muddling the two just ultimately discourages both builders and investors,” Sun told Yahoo Finance.
As Robinhood’s Quirk pointed out, “Obviously, we’re not adding coins at the speed of some of the crypto-only competitors.”
Crypto trading earned Robinhood $48 million in the fourth quarter.
Compared to other platforms, Robinhood’s slower pace at listing new crypto assets carries more weight according to 46-year old Chas Wilson, a retail investor who lives in Jupiter, Florida.
“I take cryptocurrencies a little more seriously once they’re listed on Robinhood,” Wilson told Yahoo Finance, admitting that he also holds an account with another exchange where he could already buy the four assets.
SOL and MATIC are both trading flat on the day at $102 and $1.40 after peaking more than 4% each Tuesday morning following the announcement. COMP, the decentralized lending token for the Compound protocol is up almost 2%, down by $2 to $130 per unit. Meanwhile, the meme coin, Shiba Inu, which trades at fractions of a penny spiked as much as 20% Tuesday morning but is also losing steam, up more than 15% since the listing.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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