In a deja vu moment for Robinhood, the trading platform faced yet another bout of technical difficulties, leaving users frustrated as they attempted to capitalize on the skyrocketing value of Dogecoin. The popular cryptocurrency, initially created as a joke in 2013, has seen a meteoric rise of over 468% in the past week and an astonishing 6,000% since the beginning of the year.
Late Thursday, as Dogecoin breached 25 cents, Robinhood’s crypto trading systems buckled under the intense demand, described by the company as “extreme pressure.” A blog post on Friday explained that a system failure occurred during order processing, leading to a temporary shutdown of the crypto order system. While the platform managed to recover within an hour, intermittent issues persisted, and a complete fix took two hours.
The surge in Dogecoin continued on Friday, reaching an all-time high above 40 cents, exacerbating the strain on Robinhood’s systems. This resulted in sporadic order failures and delayed notifications for users, further fueling frustration among investors.
This recent episode has reignited concerns about retail investors’ access to equity markets, echoing the backlash Robinhood faced in late January when it temporarily restricted the buying of GameStop and other “meme stocks.” However, the issues with Dogecoin are attributed to technical glitches rather than deliberate restrictions.
Robinhood users took to social media to express their discontent, with one user accusing the platform of trying to “slow the #dogecoin community down.” Another tweet lamented, “Robinhood is doing that thing again where they keep normal everyday people from becoming millionaires.”
This incident adds to Robinhood’s string of public relations challenges, including an ongoing lawsuit by Massachusetts securities regulators. The regulators allege that the platform failed to protect its system from outages and disruptions.
In response to the uproar, Robinhood sought to reassure customers in a blog post, acknowledging the interruptions as unacceptable. The company, currently at the center of the Dogecoin surge, urged users to stay updated on its Twitter account and status page while warning that intermittent service interruptions may persist over the weekend due to continued interest in crypto.
Despite being a visually appealing and user-friendly app, Robinhood’s history of technical outages raises questions about its reliability during crucial trading periods. The blog post did not delve into technical details, leaving users in the dark about the severity and causes of the failure.
As Dogecoin enthusiasts seek opportunities in the crypto market, the reliability of trading platforms like Robinhood becomes paramount. The incident underscores the need for transparency and reliability in trading platforms, especially as competitors like Coinbase gain prominence, even if they don’t support Dogecoin. Investors are left wondering about the potential impact of such outages on Robinhood’s overall stability and eagerly await the release of the company’s S-1, hoping for insights into the risk factors it faces.