Robinhood Made Millions of Dollars Thanks to Dogecoin
On August 18, Robinhood published its second-quarter financial results. The company stated that crypto accounted for more than half of all transaction-based sales in the second quarter, and 62% of crypto revenue came from Dogecoin.
The company’s first earnings report since its initial public offering (IPO) contained many interesting details. Robinhood’s revenue from crypto transactions was $233 million, up from 5$ million in the year-ago quarter. The crypto accounted for 52% of transaction-based revenue, rising from 17% in the first quarter according to the company.
The company from Menlo Park also noted that more than 60% of cumulative net-funded accounts traded crypto in the second quarter.
Robinhood, its financial results, and Dogecoin
It gained popularity by offering free stock trading to a new generation of investors. However, it has also been a big beneficiary of the surge in cryptocurrency markets. Its app allows investors to buy and sell seven cryptocurrencies including Bitcoin, Bitcoin Cash, Dogecoin, and others.
Cryptocurrencies had to deal with numerous challenges in the second quarter. The price of the world’s largest cryptocurrency Bitcoin fell by more than 40% after a huge rally in 2020. Hopefully, it since recouped much of that value. Meanwhile, Ethereum rose by about 18% in the second quarter of the year. Another cryptocurrency that reached great results is Dogecoin.
In the first quarter, Dogecoin accounted for 34% of Robinhood’s cryptocurrency transaction-based revenue. Much of that increase coincided with tweets about Dogecoin from Dogecoin supporter Elon Musk.
Furthermore, that number jumped significantly higher in the latest period as its value continued to soar. The company even included a specific risk in its IPO prospectus as well as a quarterly report tied to Dogecoin. Importantly, it noted that its business could be hurt “ if the markets for Dogecoin deteriorate or if the price of Dogecoin declines”.
It makes money in crypto by routing orders to market makers that the company from California says offer “competitive pricing” and taking a percentage of the order value. In total, crypto assets on its platform almost doubled in the second quarter to $22.7 billion from $11.6 billion a quarter earlier.
Coinbase, PayPal, which went public earlier this year are other popular services used by consumers to buy and sell cryptocurrencies. Let’s not forget about Square’s Cash App as well.
