Robinhood says Dogecoin accounted for 34% of crypto trading revenue in Q1
Robinhood says Dogecoin (DOGE) was responsible for more than a third of its first quarter revenue this year. The popular online stock and cryptocurrency broker has warned that its profits could fall if trade in the famous pet coin declines.
Robinhood plans to go public soon, and its Initial Public Offering (IPO) dossier contains several useful information for crypto investors.
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1. Robinhood Made Almost $ 30 Million In Q1 Revenue From Trading Dogecoin
Dogecoin has dominated the headlines this year after the coin’s price rose from $ 0.0047 on January 1 to an all-time high of $ 0.7376 on May 8. That’s a jump of over 15,500%. What started out as a joke, designed to poke fun at how people bought cryptocurrencies they didn’t understand, has grown into a global phenomenon.
Robinhood’s total cryptocurrency revenue in the first quarter of 2021 was nearly $ 90 million. While the brokerage has seven coins available for trading, Robinhood reported that 34% of its transaction-based income came from Dogecoin in the first quarter of 2021. This compared to 4% in the last three months of 2020.
The regular tweets of Elon Musk, who dubbed himself the Dogefather, played a big part in the success of the play. While critics fear the piece will have no purpose, the active community of Doge fans believe the price could rise further.
Robinhood warned that if the Dogecoin market deteriorates without being replaced by another coin, it could have a negative effect on the company’s bottom line.
2. Robinhood’s crypto assets grew over 750% from 2019 to 2020
According to Robinhood, more than 9.5 million customers traded more than $ 88 billion worth of cryptocurrency on its platform in the first quarter of 2021. This reflects the growth in cryptocurrency trading as well as the success of the cryptocurrency offering. Robinhood crypto trading.
Robinhood, which launched its cryptocurrency service in 2018, had $ 414.7 million in crypto assets under management in 2019. As you can see in the table below, that number has grown significantly in just one. year and is expected to increase further by the end of 2021..
Robinhood’s cryptocurrency assets in custody
3. Robinhood still plans to launch the wallet feature
In March, Robinhood CEO and co-founder Vlad Tenev promised clients that the company would launch a portfolio with deposits and withdrawals “as quickly as possible.”
Currently, Robinhood provides a custodial service, which means its investors cannot directly hold their crypto assets. Many crypto investors prefer to keep their assets in a non-custodial wallet that they control. This reduces the risk of hacking and also makes it easier to spend or trade crypto.
Robinhood’s deposit document reiterates the brokerage’s commitment to providing users with full functionality of the wallet. It also explains some of the challenges of keeping this promise. These include increased regulatory requirements, technical developments and an increased risk of errors.
Bumpy road ahead
It is clear from Robinhood’s IPO filing that cryptocurrency has become a key part of its business. However, the brokerage also warned that its third quarter earnings would likely be lower as it expects cryptocurrency trading levels to drop during this time frame.
And, like most people in the industry, Robinhood is aware of the risks involved. These include:
- Changes to cryptocurrency regulations
- Potential manipulation of cryptocurrency markets
- Social media activity that impacts cryptocurrency prices
- Technical problems or modifications made by individual parts
But overall, the numbers show how much the cryptocurrency has grown, although it’s unclear what will happen next.