In recent cryptocurrency landscape news, Arkham Intelligence announced that Robinhood owns one of the world’s largest Ethereum (ETH) wallets. The broker allegedly holds more than 1.5 million ETH, a figure that translates into a staggering $2.54 billion.
Astonishingly, this ETH wallet is only the fifth largest, trailing behind Ethereum’s beacon deposit contract, a wrapped Ether contract, and wallets owned by renowned exchanges such as Kraken and Binance. Specifically, the beacon deposit contract towers over the rest with an impressive 29 million ETH, equivalent to a quarter of the total Ethereum supply.
Robinhood’s wallet is not exclusively devoted to Ethereum, however. It also embraces over 100 other ERC-20 tokens, collectively valued at $177.1 million. This figure pushes Robinhood’s total holdings in Ethereum-based tokens to a whopping $2.71 billion.
Critics may raise an eyebrow at such monumental sums, yet Arkham assures that this is strictly above board. In response to inquisitive users, the intelligence firm clarified that these funds are held in custody on behalf of users pursuant to SEC requirements stipulating a 1:1 backup for crypto balances on Robinhood.
Yet, it seems Robinhood remain steadfast in their quest to break down traditional barriers and simplify DeFi for users. In a recent announcement, the company stated plans to further refine its wallet product by extending support to Bitcoin, Dogecoin, and in-app Ethereum swaps. This innovative approach aims to democratise the Web3 ecosystem and make it more attainable for everyday individuals.
Despite such advanced propositions and Robinhood’s burgeoning crypto presence, the company is no stranger to challenges. Trading volumes have reportedly plummeted 68% compared to the prior year, with crypto trading dipping to $2.1 billion in May 2023 compared to $6.6 billion a year earlier. Similarly, Robinhood’s Q2 2023 earnings report disclosed an 18% decrease in crypto trading revenue from the preceding quarter.
On a crucial note, Robinhood recently ended its advisory relationship with market maker Jump Trading, which may signify potential regulatory concerns in the US.
This situation manifests the tricky balancing act Robinhood and similar entities try to manage. Whilst these apps strive to simplify, democratise, and popularise cryptocurrency trading, factors such as market volatility, changing regulations, and declining trade volumes pose a threat to their growth and profitability. This paradox paints an intriguing picture of the future of cryptocurrency apps and the challenges they face in overcoming the rising scepticism surrounding them.
Source: Cryptonews
