Robinhood Emerges As Third-Largest Bitcoin Holder Despite Crypto Slump

Data from Arkham Intelligence shows that Robinhood transferred 118,300 Bitcoin to a single wallet over three months. This raises questions about the firm’s exposure to Bitcoin, especially given its declining crypto trading volumes and legal troubles.

Key Takeaways

  • Robinhood holds around $3.25 billion in Bitcoin, making it the third largest BTC holder behind Binance ($6.5 billion) and Bitfinex ($4.6 billion).
  • The data suggests that Robinhood is emerging as a major crypto venue in the US, potentially capitalizing on the decline of FTX and Binance US.
  • Robinhood is still battling allegations of market manipulation after it halted trading in several meme stocks, including GameStop.

Robinhood Holds Over $3 Billion In Bitcoin

The crypto wallet, which begins “bc1ql”, started attracting interest in recent months as its holdings began to swell and its owner remained a mystery.

It has since emerged that the wallet belongs to Robinhood, who moved billions worth of Bitcoin into it between 8 March and 14 July this year.

The wallet likely represents a significant portion of the firm’s Bitcoin holdings, which it manages on behalf of clients.

The US-headquartered discount brokerage also holds over $7 billion in other cryptos, including Ethereum and Dogecoin.

Market Headwinds See Crypto Trading Volumes Fall

Despite winning market share from rivals, Robinhood’s crypto trading volumes have slumped in recent months, as the two big players, Bitcoin and Ethereum, have experienced limited price action.

Robinhood earned $31 million in revenue from crypto transactions in the second quarter, nearly half of the $58 million it earned in the same quarter last year, according to the latest earnings report.

Implications For The Market

Such large amounts of Bitcoin have historically been held by traditional crypto exchanges. Now Robinhood, whose client base is known for their active short-term trading, including in meme stocks like AMC and GameStop, could potentially have a sizeable impact on the crypto market.

And while crypto exchanges don’t have a strong track record, Robinhood has also been in the crosshairs for its treatment of customers and their funds. Only last Friday the firm suffered a defeat in a Massachusetts court in its battle with state securities regulators.

Ultimately, some crypto investors will have concerns about whether Robinhood can be trusted. The brand may find that some aspiring traders turn to reputable crypto brokers instead.

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