In brief
- Brokerage app Robinhood said 9.5 million of its customers traded crypto in Q1 of 2021.
- A historic crypto market bull run and the recent GameStop short squeeze may have had something to do with it.
The online brokerage service Robinhood said on Thursday that 9.5 million of its customers traded cryptocurrency on its platform in Q1 of 2021.
That’s up from just 1.7 million in Q4 of last year, a 458% spike.
In a blog post, the company chalked up the numbers to crypto’s growing “popularity”: the global market cap of all cryptocurrencies has doubled in the past three months to over $2 trillion.
The blog post also says that Robinhood’s founders are “fascinated by blockchain technology,” and that “the prospect of an open and decentralized global financial system, one where everyone can have access to financial services, strongly aligned with Robinhood’s mission.”
And while it’s certainly true that growth on a popular trading platform like Robinhood may mirror growth in the rest of the market, there may be another contributing effect that the company isn’t pointing out.
In late January, stock traders used the Reddit message board r/WallStreetBets to juice the price of ailing names like GameStop, Blackberry, and AMC. When Robinhood responded by temporarily halting trades on those stocks, many of those traders turned their attention to cryptocurrencies like Dogecoin; the price of that token shot up significantly after social media endorsements from Tesla CEO Elon Musk.
Robinhood eventually restricted crypto trading, too.
The company is now facing dozens of lawsuits from unhappy customers, some of which are crying market manipulation. Despite the negative attention, the app has clearly enjoyed a giant surge in crypto activity.