Future Tech Watchlist: This Company Is Offering Secure Crypto Trading Free

0 | By Michael A. Robinson

By any stretch of the imagination, the most recent high-profile crypto-heist was a real doozy.

North Korea’s shadowy Lazarus Group of elite hackers is believed to be the culprit that hacked into Axie Infinity, a non-fungible token (NFT)-based online game, where they stole about $620 million cryptocurrencies.

There have, in fact, been quite a few incidents over the past 12 years or so, from the Mt. Gox incident in 2011, when investors lost $8.75 million in BTC, to the $40 million Binance caper, which cost investors $40 million.

And here’s it’s important, as always, to make a distinction: It’s still virtually impossible to hack a cryptocurrency itself. That’s not the case, though, with wallets, exchanges, and storage media.

Of course, when you hold fiat currency in a U.S. bank, your deposits are insured. When crypto exchanges are hacked, they may have the wherewithal to make you whole… but they may not. So, when it comes to cryptocurrency, it’s incumbent on you to take steps to secure your assets, starting with your digital keys.

As my colleague, David Zeiler likes to say: “Not your keys? Not your crypto.”

The good news is, it’s easier than ever for investors to step up and take control of their keys and crypto – and one company is helping to do just that…

This Company Has its Sights Set Even Higher

Robinhood Markets Inc. (HOOD) burst onto the scene and upended the staid, traditional brokerage-for-a-fee rubric. Its “no fee for trades” model sparked a race to the bottom among competitors, which has made free trades an industry standard.

Having conquered the discount brokerage market, Robinhood began to roll out a cryptocurrency trading pilot program in a few “marquee” coins back in 2018. The program was a smashing success, and it quickly went nationwide.

In the short years since Robinhood has given users the ability to trade more and more coins on its crypto platform. They’ve introduced some 9.5 million retail investors to crypto – with no fees.

Cryptocurrency brought Robinhood nearly $50 million in revenue in the first quarter of 2022.

The whole time, though, users made their own arrangements for wallets. In fact, many advanced or experienced crypto traders avoided Robinhood’s platform because it was essentially impossible to take crypto out of their system and move it to, say, Kraken or Coinbase.

Crypto, of course, is all about flexibility, security, and decentralization, and a lot of folks felt being “tied” to Robinhood’s platform diminished or even defeated the fundamental purpose of digital assets in the first place.

Robinhood, it seems, was paying attention.

This Is a Game-Changing Move for Small Crypto Investors

To address these shortcomings – and make further inroads into the multitrillion-dollar crypto market dominated by names like Coinbase Global Inc. (COIN) – Robinhood plans to roll out a crypto wallet pilot program.

At the recent Bitcoin Conference 2022 in Miami, Robinhood’s Chief Product Officer Aparna Chennapragada announced there were two million peopleon the waitlist for the first Robinhood cryptocurrency wallets.

There was more to the announcement.

Chennapragadaadded, “We are also working to add the ability to transact on the Bitcoin Lightning Network, so customers can send & receive BTC in seconds, for pennies instead of dollars.”

Setting up a Robinhood wallet doesn’t take long at all – it’s similar to opening up a bank account.

You need to verify your identity with a government-issued driver’s license or ID, a valid passport, or a permanent resident card. Then it’s necessary to secure your account with two-factor authentication (2FA). You do this with one of the several apps available, including Authy, Duo Mobile, or Google Authenticator from your iPhone or Android device.

After a brief period for approval, users can start trading crypto on Robinhood and storing it securely.

One feature the company is working on could be big for users.

Cryptocurrency transactions cost money – the price of the computational power needed to process the transaction. Bitcoin calls them “transaction fees,” while on the Ethereum blockchain, they’re known as “gas fees.” Robinhood won’t charge anything over and above those going rates.

While Robinhood’s platform is user- and beginner-friendly, as well as inexpensive, there are some limitations.

The transfer limit on the platform is only $5,000 of crypto – or a combined 10 transfers in a 24-hour period. And the wallet won’t handle ERC-20 tokens, non-fungible tokens (NFT), or any asset that is not on Robinhood’s trading list. Robinhood advises traders not to send unsupported coins to their Robinhood wallets because those assets could be “lost… irreversibly.”

Now let’s take a look at the stock itself…

It’s Not Time Yet

Now then, it’s tough to recommend buying HOOD shares outright at the moment; the current heavy selling on the stock markets has brought us some opportunities, but I’m not convinced now is the time to move on this stock.

$48 million in crypto revenue notwithstanding, Robinhood’s first-quarter earnings performance was mixed-to-poor. Many investors are turned off, but it’s important to put in perspective how unique – and how massive – Robinhood’s growth in 2020 was; investors should tailor their expectations accordingly.

Consider this a “watchlist” company.

I’ll be keeping my eye on this stock, which is trading above $10 right now, and when it’s time to move, I’ll be right in touch.

Of course, there’s always a way to play tech.

I can enthusiastically recommend learning about this quantum computing play here. This brand-new “flavor” of computing – radically different and much faster than anything that’s come before – is likely to ignite an $8 trillion revolution. China has invested $10 billion in quantum tech, but the United States is making moves of its own – moves that could benefit a tiny company poised to soar over the next months. Here’s what you need to know…

Cheers and good investing,

Michael A. Robinson

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