If you’re a crypto trader who uses Robinhood, we might have some news that affects you.
As per a CoinDesk exclusive report, Robinhood, the popular app that lets you trade stocks, options, and crypto, has parted ways with one of its main partners in the crypto space: Jump Trading.
SCOOP: @RobinhoodApp, whose entry into crypto several years ago was powered by Chicago-based juggernaut @jump_, is no longer doing business with the firm, a source says.@realDannyNelson reportshttps://t.co/lMKIkTIIkm
— CoinDesk (@CoinDesk) August 29, 2023
Jump Trading is a big name in the world of high-frequency trading. It’s a company that uses sophisticated algorithms and technology to buy and sell large amounts of assets in milliseconds.
Jump Trading was also the main provider of liquidity and execution for Robinhood’s crypto orders. That means it helped Robinhood fill your orders quickly and smoothly.
So why did Robinhood and Jump Trading break up?
Well, it’s complicated. The two companies had been working together since 2019, when Robinhood launched its crypto platform. But things started to go sour in recent months.
One reason is that Jump Crypto, the digital-assets unit of Jump Trading, has been pulling back from the US market. It faces a lot of competition and regulation in the US, which makes it hard to operate profitably.
Another reason is that Robinhood and Jump Trading have different rules and requirements to follow. They have to deal with various agencies and jurisdictions that oversee the crypto market.
These regulators have different standards and expectations for how crypto platforms should operate. This makes it difficult for Robinhood and Jump Trading to work together effectively.
What does this mean for you as a Robinhood user?
Well, don’t worry too much. The split between Robinhood and Jump Trading is unlikely to have a major impact on your trading experience.
Robinhood still has other market makers that it can use to provide liquidity and execution for your crypto orders.
However, you might notice some changes in fees or spreads for some crypto pairs.