Overdependent on Dogecoin? Robinhood Warns DOGE Slowdown Could Hurt Its Business
Publicly listed trading platform Robinhood says that Dogecoin trades have contributed significantly to its revenues.
The company behind the popular trading app says in a quarterly U.S. Securities and Exchange Commission (SEC) filing that if Dogecoin trades fall, its business could suffer.
“A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected.”
During the second quarter of 2021, Robinhood generated 62% of its crypto revenues from Dogecoin, up from 34% in the previous quarter, according to the filing.
“While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended June 30, 2021, 62% of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 34% for the three months ended March 31, 2021.”
Robinhood’s crypto revenues during the second quarter amounted to just over $233 million, up from $5.3 million during Q2 of 2020, per the filing.
In addition to Dogecoin, Robinhood’s clients can buy and sell using Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Ethereum (ETH), Ethereum Classic (ETC) and Litecoin (LTC).
According to Robinhood chief financial officer Jason Warnick, Q2 of 2021 was the first quarter in which the majority of the platform’s new users placed their first trades in cryptocurrencies rather than equities.
“So this was the first time that we’ve seen more first trades in crypto versus equities and we love the momentum of our cryptocurrency business…”
The company’s CEO, Vlad Tenev, says that Robinhood is aiming to launch cryptocurrency wallets on the platform.
“I think the nearer term kind of foundational feature that we’ll be looking to rollout will be wallets or deposit and withdrawal functionality.”
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