- Short Term vs Long Term - 10%10%
- Priced In - 90%90%
Yesterday, Robinhood Crypto, a well-known California-based broker and parent company of Robinhood app, was granted access to the New York market after the financial regulators in New York approved their BitLicense as well as money transmission license. The regulators also approved the BitLicense for another firm, LibertyX.
The announcement was made on 24th January by the New York State Department of Financial Services, also called DFS. This means the app can now trade in seven most popular cryptocurrencies in the state of New York that include BTC, ETH, BCH, and LTC.
Similarly, the license for LibertyX allows the users to trade in Bitcoin using their traditional debit cards from ATMs across the state. LibertyX is also the first company that received a virtual currency license or that sells cryptocurrency using debit cards. After the recent inclusion of LibertyX and Robinhood, the total number of firms with crypto licenses in New York has increased to 16.
Even though Robinhood is a popular trading app, it had its fair share of controversies as well. In one recent move, they issued interest-bearing bank accounts to their users that were not protected by SIPC (Securities Investor Protection Corporation).
Vlad Tenev, the co-CEO of Robinhood Crypto also praised NYDFS for the move and claimed in their recent press release that NYDFS were very helpful throughout the process.
On the other hand, some critics also criticized NYDFS for their review process and called it “not fast enough”. Most analysts claim that the slow down caused by the government due to their lengthy and sometimes unnecessary processes and regulations is pushing investors out of the crypto market. According to them, New York being one of the largest financial and innovative centers should be more welcoming to innovative industries like crypto and blockchain.
Ramifications For Crypto Prices
This was a foregone conclusion for Robinhood and its 4 million users who are mostly in the 20-38 age group. The move made too much sense as the demand for crypto spiked in late 2017 and requests for Bitcoin and crypto currency USD pairs widely requests among Robinhood users.
We do not believe that this announcement will have any short term impact on the overall crypto market and is more of a long term infrastructure initiative that will make crypto more accessible and trade able to a wider range of investors. By no means is this move indicative of mass adoption but rather a small step towards solidifying crypto as an asset class.