Robinhood Launching New Gift Crypto Feature Ahead of Xmas Holiday
The new feature would allow users to gift cryptocurrency to other users.
Robinhood increasingly focuses on improving its crypto offerings.
RobinHood Markets Inc. has announced that it is launching a feature that would allow users to gift cryptocurrency to other users. The feature is set to enable users to gift cryptocurrencies to friends and family members over the holiday season. On Thursday December 16, the popular commission-free stock trading and Investing app stated that US users, except those in Hawaii and Nevada, could send as little as $1 worth Bitcoin or other six crypto coins with a personalized digital gift card and a written message of up to 180 characters to other users. The feather is scheduled to start functioning on December 22.
A sender can retract the gifted money before the recipient accepts it. To ensure that the crypto is not lost by a recipient unable or unwilling to use it, the trading app has set up a 14-day period for the recipient to accept the gift after which it will be charged. New customers can claim a gift by downloading the app and signing up for a Robinhood account. Gifts can be as small as $1, selected from seven available cryptocurrencies on the platform, including Bitcoin, Ether and Dogecoin.
The Robinhood Crypto COO and VP of Product Operations, Christine Brown talked about the development: “Crypto gifting is a great way for our customers to help remove the emotional and economic barrier of their friends and family taking their first step into crypto. In addition, it is an easy and immediate gift for those that are already crypto fans.”
The move by Robinhood planning to launch the service is seen as a strategy to mimic a similar feature being offered by the Block Inc (formerly Square), which allows customers to send a small part of Bitcoins and fractional shares of stocks to other users. On December 7, the Block Inc. released a study showing that many US users would be willing to accept cryptocurrencies like Bitcoin, Ether and Dogecoin as gifts during this holiday season.
Pushing Further into Crypto Business
The development by Robinhood comes at a time when the firm is facing a potential regulatory challenge to its primary revenue stream. The firm is doubling down and appears to be going all into crypto. The popular zero-commission stockbroker is increasing its focus on making improvements on its crypto offerings. The firm is currently testing the apps new crypto wallet and forwarding features. Users can already purchase and sell cryptocurrencies on the platform. But, the wallet feature would allow users to store and manage all their crypto coins in one place and use them without converting them into fiat currencies (like US dollars). This is a highly sought-after feature that could make RobinHood more competitive with larger crypto platforms like Coinbase. Recently, Robinhood stated that the wallet would enable its customers to set up regular investments in cryptocurrencies by automatically setting aside a certain amount to be invested on a regular basis.
Robinhood‘s interest in expanding its crypto offerings is justified. In the second quarter of this year, cryptocurrencies amounted to over 51% of the firm’s total trading revenue, outperforming the company‘s core options and equity trading businesses. Customers who signed up for Robinhood accounts during the second quarter appeared to have done so mainly to get crypto trading services. During the quarter, more new customers made their first transactions in crypto coins rather than stocks. The firm considers increasing crypto exposure as a way to mitigate some risk as the company’s core equity and options businesses are experiencing increased scrutiny from the US SEC for payments in the order flow model. The SEC does not control the crypto market. But, since the crypto market is cyclical and the companys revenue depends on retailers, it can be vulnerable during a recession.
