Robinhood moved to restrict users from hastily buying cryptocurrencies Friday as the prices of two popular digital coins surged.
In a post on its website, Robinhood said it temporarily disabled â€œInstant Depositsâ€� for cryptocurrency purchases. That means users wonâ€™t be able to buy digital currencies with money they add to their accounts until the deposit settles, which could take up to five business days.
Robinhood imposed the restrictions amid massive rallies in both Bitcoin â€” the worldâ€™s biggest cryptocurrency â€” and Dogecoin, an alternative coin based on an internet meme that started as a joke.
Dogecoinâ€™s price had spiked by more than 348 percent to roughly 5 cents as of 8:35 a.m. thanks largely to a Reddit forum thatâ€™s been pumping it up â€”Â just like a message board has caused GameStopâ€™s stock to explode.
Bitcoin, meanwhile, was recently up nearly 20 percent at $37,566.14 after Tesla CEO Elon Musk mentioned the cryptocurrency in his bio on Twitter, where his posts are known to move markets.
Robinhood did not immediately respond to a request for comment. But a spokesperson for the startup told CNBC that it turned off the â€œinstant buying powerâ€� feature for cryptocurrencies â€œdue to extraordinary market conditions.â€�
â€œCustomers can still use settled funds to buy crypto,â€� the spokesperson told CNBC. â€œWeâ€™ll keep monitoring market conditions and communicating with our customers.â€�
Dogecoin has become the favored cryptocurrency on Redditâ€™s â€œSatoshiStreetBetsâ€� message board, a hub for crypto traders named for Bitcoinâ€™s pseudonymous founder, Satoshi Nakamoto.
Users on the site talked about pushing the price of a single Dogecoin up to $10 â€” which would be a massive feat given that it was worth barely more than a nickel even after Fridayâ€™s surge.
Musk added fuel to the fire by tweeting a fake magazine cover for â€œDogue,â€� a dog-themed sendup of Vogue. The SatoshiStreetBets crowd took that as a sign that Musk supported their efforts to boost Dogecoinâ€™s value.
â€œElon heard us,â€� user AbduMad wrote on the message board on Thursday.
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