The news that Robinhood had ended its partnership with Jump Trading after an approximately yearlong working relationship has stirred some speculation. Robinhood and Jump Trading had been working together in the cryptocurrency market since June 2020.
According to reports, Robinhood was working with Jump Trading to facilitate the execution of large trades on the Robinhood platform with minimal price impact, increasing the overall liquidity of the platform.
Jump Trading is a proprietary trading company which deals in financial derivatives and is one of the largest liquidity providers in the U.S. markets. They are also known to have extensive operations in crypto markets, so it is no surprise that Robinhood sought them out to increase its own liquidity.
While the reasons for the collaboration ending have not been revealed, some speculation has arisen around the timing of both the collaboration and cessation. The end of the collaboration comes at a time when the crypto markets have been rallying and making record highs, making it a good time for traders to get involved in the market. That suggests that Robinhood might have decided to end the partnership because it no longer needed Jump Trading’s liquidity as it had become a larger and more liquid platform itself.
It is also possible that the two companies had a disagreement about their roles in the collaboration. Whatever the reason, Robinhood has not yet made an official statement concerning this news.
