Robinhood temporarily restricted users on Friday from buying crypto securities instantly, citing “extraordinary market conditions” following a price spike of Bitcoin and an unlikely meme-inspired digital currency.
“Due to extraordinary market conditions, we’ve temporarily turned off Instant buying power for crypto. Customers can still use settled funds to buy crypto,” a Robinhood spokesperson told Reuters. “We’ll keep monitoring market conditions and communicating with our customers.”
The Washington Examiner reached out to Robinhood but did not immediately receive a response.
Robinhood previously allowed investors to opt in to a premium “Instant Buying” feature to access funds from bank deposits immediately. Now, users can only purchase cryptocurrencies with funds already in their accounts until further notice.
Regular deposits can take up to five business days to clear, Robinhood told CNBC.
The company’s decision to block instant trading of crypto securities comes as the price of Bitcoin jumped overnight, rising from a value of $32,000 to $38,500 per token. Tesla CEO Elon Musk updated his Twitter bio to say “#bitcoin” Friday, causing a 14% jump to the cryptocurrency.
Along with the Bitcoin surge came an unlikely jolt in a cryptocurrency called Dogecoin, a token created as a joke in 2013 and based on the popular internet meme Doge, according to the digital currency’s webpage.
This week, Dogecoin ascended over 650% in value when users rallied behind it. Dogecoin was previously valued at less than a penny, but it peaked Thursday evening at 8 cents a share, according to Coinbase.
The spike comes in the same week Wall Street erupted in confusion over the enormous spike in GameStop’s share price, which saw a 1,700% gain from its initial value this month after Reddit users banded together to buy the stock, costing hedge funds that had shorted the stock to lose billions.
Robinhood and several prominent online brokers imposed restrictions on Thursday on the types of trades permitted for stocks such as GameStop, AMC, BlackBerry, and others that had been depreciating on the market until a group of internet users caused prices to go up. The results caused disruption in short investments by hedge funds and cost firms billions.
