Robinhood halts crypto trading as digital coin trades spiked 800% 'after GameStop and AMC stock restored'
ROBINHOOD has halted crypto trading due to "extraordinary market conditions".
Digital coin trades have been shut off by the app as the price of bitcoin and a meme-inspired cryptocurrency spiked by as much as 800 per cent.
The restrictions put in place by the popular stock trading app come as GameStop and AMC stock has reportedly been restored following a block by Robinhood.
Robinhood users complained that the platform had stopped instant deposits for crypto purchases, only allowing them to buy currencies with funds already deposited in their accounts.
According to Robinhood, it can take up to five business days for deposits to clear.
A spokesman for the app confirmed that crypto trading has been restricted.
They told CNBC: "Due to extraordinary market conditions, we’ve temporarily turned off Instant buying power for crypto.
“Customers can still use settled funds to buy crypto.
"We’ll keep monitoring market conditions and communicating with our customers."
The halt came after dogecoin, a parody cryptocurrency that adopted an internet meme of a Shiba Inu dog as its logo, spiked as much as 800 per cent.
Dogecoin was originally invented as a "fun version of bitcoin" in 2013 by software engineers Jackson Palmer and Billy Markus and a single coin was worth just $0.005405 at the start of 2021.
But the price rose by around 300% to $0.057 (£0.041) in just past 24 hours, and has surged higher since
It comes after a bunch of Reddit threads called for the cryptocurrency to hit a value of $1 per coin.
The target was an attempt to mirror the recent share surge in heavily shorted companies like GameStop, which forced trading app Robinhood to restrict buying activity.
Popular stock trading app Robinhood was slammed after it stopped users from buying and selling GameStop shares and other stocks popular with retail traders.
Amateur investors sent the share price of US computer games retailer GameStop soaring this week, with lots of the stock purchases coming through trading apps.
But this has left apps such a Robinhood in a tricky situation as they need enough money to manage requests to buy and sell on their platform.
GameStop surged 83% on Friday after brokers including Robinhood eased some restrictions on trading following outrage from politicians and calls for action from regulators.
The major increase in GameStop shares come after the Thursday trading day closed with the company down 44 per cent.
Despite limited trading rules prompted AMC Entertainment shares to drop 56 percent, the company later rebounded to 70 percent in pre-market trading on Friday.
Amateur investors dramatically increased the share price of GameStop – a US computer games retailer that has been struggling to compete with the shift to online shopping – with a majority of stock purchases coming through trading apps.
In a push to prevent hedge funds from making money on Gamestop's bad performance, a group on the social media website Reddit pushed users to buy the stock to drive up share prices.
It comes after bitcoin cryptocurrency reportedly skyrocketed 20 percent after Elon Musk added #bitcoin to his Twitter bio as Dogecoin stocks surged.
Musk – a self-made billionaire and the richest person in the world – simply changed his Twitter biography on Friday to read "#bitcoin."
At 3.22am ET, the 49-year-old Tesla boss tweeted: "In retrospect, it was inevitable."
Approximately eight minutes later, the virtual currency – created in 2009 by someone with the alias Satoshi Nakamoto – soared, CNBC reported.
According to the news outlet, CoinDesk data showed Bitcoin went up to $5,000 "in the space of an hour to trade at $37,299."
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