Robinhood Markets Inc (NASDAQ:HOOD) may be waiting until the beginning of 2022 to roll out cryptocurrency wallets that would allow users to withdraw and deposit coins such as Dogecoin (CRYPTO: DOGE) the YouTuber Matt Wallace has claimed.
What Happened: Wallace tweeted a video late-night Monday, which contained his theory on why Robinhood was delaying the rollout of the cryptocurrency wallets.
— Matt Wallace (@MattWallace888) August 17, 2021
Wallace, a well-known Dogecoin commentator, claimed that Robinhood was “scared that people are going to leave their platform.”
Pointing towards Robinhood’s suspension of trading in GameStop Corporation’s (NYSE:GME) shares on the platform during a short squeeze carried out by retail investors earlier in the year, which later also was extended to cryptocurrencies like Dogecoin, Wallace said, “a lot of people want to leave, a lot of people, if they do that again especially, would definitely leave.”
“There’d be a big campaign to use your Dogecoin crypto wallets on Robinhood to move it elsewhere and so because of that they [Robinhood] are nervous and they are scared. I believe they’re still working on it.”
Wallace also theorized a secondary reason for the delay in wallet rollouts on Robinhood. According to him, after February 2022 “taxes will be different.”
“If you have your money currently in a cryptocurrency and you wait longer than a year then you no longer have to pay that super high tax rate and because such a huge amount of the Dogecoin spikage was in that February period a lot of the people who initially invested have been holding since around then,” said Wallace.
He claimed that Robinhood knows that if they wait until February 2022, “a lot of people may want to leave anyway because they would have that significantly lower tax rate when they actually moved their money out and transferred it somewhere else.”
As per Wallace, Robinhood does not want to advance such an eventuality by releasing a wallet ahead of the lower tax rates kicking in.
Why It Matters: The YouTuber pointed to Robinhood CEO Vlad Tenev promise to launch cryptocurrency wallets “as fast as possible” in March.
Tenev, however, had also said at the time that the online broker’s top priorities are to ensure the service scales as it handles the exponential growth in cryptocurrencies and also to achieve top-level customer support.
Jack Dorsey-led Square Inc (NYSE:SQ) confirmed it too was working on a hardware wallet for BTC which would be built “entirely in the open, from software to hardware design, and in collaboration with the community.”
Wallace urged his followers to send his video to send out the message to the broker that “we want to see the Robinhood wallets happening no matter what.”
Price Action: DOGE traded 1.36% lower at $0.33 over 24 hours at press time. BTC was down 2.6% at $46,293.01. On Monday, Robinhood shares closed 6.79% lower at $47.19.