Robinhood Says Dogecoin Accounted for 34% of Crypto Trading Revenue in Q1

Robinhood says Dogecoin (DOGE) was responsible for over a third of its first-quarter revenue this year. The popular online stock and cryptocurrency broker warned that its profits might fall if trading of the well-known pet coin declines.

Robinhood is planning to go public soon, and its initial public offering (IPO) filing contains several useful tidbits of information for crypto investors.

1. Robinhood made almost $30 million in Q1 revenue from Dogecoin trading

Dogecoin has dominated the headlines this year after the coin’s price increased from $0.0047 on Jan. 1 to an all-time high of $0.7376 on May 8. That’s a jump of over 15,500%. What started as a joke coin, designed to make fun of the way people bought into cryptocurrencies they didn’t understand, has become a worldwide phenomenon.

Robinhood’s total crypto trading revenue in the first quarter of 2021 came to almost $90 million. While the brokerage has seven coins available for trading, Robinhood reported that 34% of its transaction-based revenue came from Dogecoin in the first quarter of 2021. This compares to 4% in the last three months of 2020.

Regular tweets from Elon Musk, who has dubbed himself the Dogefather, have played a large part in the coin’s success. While critics worry that the coin doesn’t have any purpose, the active community of Doge fans believes the price could still go higher.

Robinhood warned that if the market for Dogecoin deteriorates without being replaced by another coin, it could have an adverse effect on the company’s bottom line.

2. Robinhood’s crypto assets increased by over 750% from 2019 to 2020

According to Robinhood, more than 9.5 million customers traded over $88 billion of cryptocurrency on its platform in the first quarter of 2021. This reflects the growth in cryptocurrency trading as well as the success of Robinhood’s crypto trading offer.

Robinhood, which launched its cryptocurrency service in 2018, had $414.7 million in crypto assets under management in 2019. That number has grown to $3.5 billion in 2020, and as of March 31, 2021, it’s already $11.6 billion. This number is predicted to be higher by the end of 2021.

3. Robinhood still plans to launch wallet feature

Back in March, Robinhood’s CEO and co-founder Vlad Tenev promised customers the company would launch a wallet with deposits and withdrawals “as fast as possible.”

At the moment, Robinhood provides a custodial service, which means its investors can’t directly hold their crypto assets. Many crypto investors prefer to keep their assets in a non-custodial wallet that they control. It reduces the risk of hacking and also makes it easier to spend or trade crypto.

The Robinhood filing document reiterates the brokerage’s commitment to give users full wallet functionality. It also explains some of the challenges involved in keeping that promise. These include increased regulatory requirements, technical development, and the heightened risk of errors.

investiki.com