As the prices of two well known digital coins spiked, Robinhood moved to ban users from hastily buying cryptocurrencies on Friday.
Robinhood said it had temporarily disabled “Instant Deposits” for purchases of cryptocurrencies in a post on its website. That means that once the deposit clears, which may take up to five business days, users would not be able to purchase digital currencies with the money they added to their accounts.
Robinhood imposed the restrictions amid massive rallies in both Bitcoin and Dogecoin.
As of 8:35 a.m., the price of Dogecoin had risen by more than 348% to roughly 5 cents, thanks mainly to a Reddit forum that pumped it up, just like the message board that caused GameStop’s stock to burst.
Meanwhile, Bitcoin was recently up almost 20% at $37,566.14, after Tesla CEO Elon Musk listed the cryptocurrency in his bio on Twitter, where his tweets are known to drive markets.
Robinhood did not respond to a request for comment immediately. But a start-up spokesman told CNBC that “due to extraordinary market conditions,” it turned off the “instant buying power” feature for cryptocurrencies.
“Customers can still use settled funds to buy crypto,” the spokesperson told CNBC. “We’ll keep monitoring market conditions and communicating with our customers.”
On Reddit’s “SatoshiStreetBets” message board, Dogecoin has become the chosen cryptocurrency.
Users on the platform spoke about raising the price of a single Dogecoin to $10, which would be a huge feat considering that it was worth barely more than a nickel even after the rally of Friday.
By tweeting a fake magazine cover for “Dogue,” a dog-themed Vogue send-up, Musk added fuel to the flames. The SatoshiStreetBets crowd took that as a sign that Musk supported their efforts to raise the value of Dogecoin.
On Thursday, user AbduMad wrote on the message board, “Elon heard us!”
— Elon Musk (@elonmusk) January 28, 2021