Robinhood has limited cryptocurrency trading based on exceptional market conditions.
A similar event took place a few days earlier this week with Gamestop and other actions.
The accelerated rise in the price of DOGE played an important role in the high volatility of trading, which led to this event.
An overheating market
The rise in the price of DOGE has drawn enormous attention to Robinhood. Cryptocurrency traders began to complain about their inability to access the app soon after the sudden surge. The platform then deactivated deposits, only allowing its users to buy cryptocurrencies with already existing funds.
Bitcoin Millionaire said it imposed the restriction due to the sudden increase in market volatility, according to a CNBC report . A spokesperson for the company explained:
“Due to the exceptional market conditions, we have temporarily disabled instant purchasing power for crypto… Customers can still use settled funds to purchase cryptocurrency. We will continue to monitor market conditions and communicate with our customers ”.
A similar event had led the investment platform to suspend the operations of GameStop . The other titles concerned were Nokia (NOK) and AMC Entertainment (AMC). This development has sparked complaints from market players through social networks.
Dogecoin price surge
Robinhood made the decision following the sudden rise in the price of DOGE, which rose more than 800% on Friday January 29. The crypto currency has developed a trend of sudden spikes after a long period of inactivity.
Additionally, Tesla founder Elon Musk contributed to this price hike. On Thursday January 28, he posted a post on Twitter, showing the cover of a “Dogue” magazine. This prompted market participants to create buying pressure, which led to the price rising.