Billionaire investor and outspoken Dallas Mavericks NBA team owner Mark Cuban has become a surprising advocate for Dogecoin, the meme coin that has seen wild surges in value so far this year, rising from less than a penny to a recent all-time high of nearly $0.42 (currently $0.27).
Cuban was once known as a Bitcoin naysayer whose primary complaint was how difficult it was for the average consumer to spend the leading cryptocurrency. His Mavericks recently added the ability to purchase team merchandise using Dogecoin and he has repeatedly called out the rising number of orders, which he contends is proof that people can easily—and actually want to—spend the cryptocurrency.
But there is one big thing standing in the way of DOGE’s continued growth, says Cuban: Robinhood. The mobile stock trading app also lets users purchase, sell, and hold cryptocurrencies, and is one of the higher-profile ways for the average consumer to buy crypto. However, due to current limitations within the app, they can’t spend it or withdraw to another account, or add crypto assets purchased elsewhere to their Robinhood wallet.
In other words, you can buy and sell crypto on Robinhood, but it’s locked within that ecosystem: you can’t spend the coins elsewhere, nor can you pull your crypto funds and drop them into an external wallet. Cuban called out that limitation yesterday on Twitter.
Because Doge is the one coin that people actually use for transactions. We take many others via @BitPay . But people spend their Doge and that means more businesses will start taking it. The greatest inhibitor to it’s growth is that you can’t spend the Doge you buy on Robinhood https://t.co/TrhT9pYkcb
— Mark Cuban (@mcuban) April 26, 2021
“Doge is the one coin that people actually use for transactions,” he tweeted, in response to a question about his support of Dogecoin. “We take many others via @BitPay. But people spend their Doge and that means more businesses will start taking it. The greatest inhibitor to its growth is that you can’t spend the Doge you buy on Robinhood.”
Robinhood co-founder and CEO Vlad Tenev responded to the high-profile criticism overnight, tweeting, “We’re working on deposits and withdrawals! Not just for DOGE, but for all coins on Robinhood Crypto.” No timeline has been offered for such functionality. Tenev previously said in March that Robinhood would offer a crypto wallet “as fast as possible.”
Cuban has strongly embraced the wider crypto world so far in 2021, becoming a major proponent of non-fungible token (NFT) crypto collectibles and investing in such startups as Nifty’s, CryptoSlam, and SuperRare. He also launched his own NFT gallery called Lazy.com, and told Decrypt in March that collectors need to “get over that perception that I have to physically be able to touch it” and embrace the “joy of ownership” with NFTs.
The Mavericks are on track to complete 6,000 DOGE transactions over the course of April, Cuban tweeted on Monday, and he revealed earlier this month that Dogecoin sales had increased more than 550% over the previous month. Cuban also tweeted that the team will hold all DOGE received from merchandise purchases on its balance sheet, betting on future gains in a way that firms like Tesla and MicroStrategy have done with Bitcoin.
Despite the wallet limitations, Robinhood has rapidly become a very popular way to purchase cryptocurrency. The firm recently revealed that 9.5 million people used the platform to buy crypto in Q1 2021, up 458% from just 1.7 million people in Q4 2020. The dramatic rise in value for assets like Dogecoin, Bitcoin, and Ethereum likely drove that user growth, but Robinhood as a whole has seen user and valuation surges over the course of the pandemic.
Robinhood has struggled with the rising crypto buying demand, however, with what the firm described as “unprecedented” demand causing multiple outages earlier this month.
Cuban previously called out Robinhood in January, explaining in a tweet thread that Robinhood was making money off of short-selling fees amidst the GameStop stock furor. He made the case for decentralized finance (DeFi) as an alternative (essentially products that offer bank-like services without the need for middlemen), noting that users would reap the benefits instead of an intermediary like Robinhood.