Robinhood To Let Users Deposit, Withdraw Dogecoin And Other Cryptos: What That Means For Investors

Robinhood Markets, Inc will allow its customers to withdraw and deposit cryptocurrencies such as Bitcoin (BTC) and the meme-themed Dogecoin (DOGE).

What Happened: The broker said in a series of tweets that it is in the process of building deposits and withdrawals for all listed cryptocurrencies. 

So much interest in Crypto! To be crystal clear , we fully intend to provide the ability to deposit and withdraw cryptocurrencies, including DOGE. Robinhood Crypto does NOT currently invest in cryptocurrency or use any customer cryptocurrency for our own benefit.

— Robinhood (@RobinhoodApp) February 17, 2021

Don’t sleep! Much wow! Robinhood Crypto offers seven tradeable coins, so you can buy and sell crypto like DOGE, BTC, ETH and LTC, 24/7/365. We’re also building deposits and withdrawals for ALL listed cryptocurrencies. https://t.co/uX8NghfAMU

— Robinhood (@RobinhoodApp) February 16, 2021

Why It Matters: Currently, Robinhood allows its users to buy, sell and hold cryptocurrencies but users are not permitted to move their cryptocurrency to other wallets. 

Last month, Robinhood had imposed restrictions and shut off the instant deposits feature for cryptocurrency trading, after the price of DOGE ran up 800%.

The brokerage had also suspended the purchase of Reddit-fueled stocks such as GameStop Corporation (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC) as retail investors carried out a short squeeze.

Tesla Inc (NASDAQ: TSLA) CEO Elon Musk seemingly agreed Tuesday that Robinhood could be the owner of the world’s largest DOGE wallet address, DH5, which holds over 28% of all circulating supply of the Shiba-Inu themed joke coin. 

Musk wants major DOGE investors to shed most of their coins citing “too much concentration” of the cryptocurrency in the hands of a few whales. 

Price Action: BTC traded 4.25% higher at $51,883.04 at press time, DOGE traded 3.12% lower at $0.051.

Benzinga's Take: The move assumes significance as the ardent cryptocurrency community considers the ability to be able to move coins out of an exchange to a different wallet, where users have ownership of private keys, vital. Robinhood, alongside PayPal Holdings Inc. (NASDAQ: PYPL) has faced criticism over such concerns, as they do not allow for such ownership.

Musk lent support to this idea earlier this month, as he bashed FreeWallet.