Robinhood Says Dogecoin Massively Boosted Q2 Revenue
Dogecoin accounted for nearly 62 percent of the $233 million in revenue generated by the commission-free cryptocurrency trading app Robinhood in the second quarter. Robinhood, which launched its IPO last month, highlighted a significant increase in its crypto revenue in Q2 2021 when compared to the same period last year in its earnings report to US authorities — from $5 million to $233 million. Dogecoin received widespread attention after Elon Musk endorsed it on social media, and billionaire investor Mark Cuban also backed it.
When the company launched its Initial Public Offering in July, it stated in the IPO prospectus that Dogecoin accounted for nearly 34% of cryptocurrency revenue in the first quarter, up from 4% in the fourth quarter of the previous fiscal year. And now, in the second quarter, the Dogecoin share has nearly doubled. The surge coincided with Musk's barrage of tweets criticizing Bitcoin, the world's oldest cryptocurrency, and in support of Dogecoin.
According to Robinhood's filing with the US Securities and Exchange Commission, cryptocurrency accounted for approximately 52 percent of all transaction-based revenue on the platform. It also stated that an increasing number of its new users preferred to make their first trades in cryptocurrency rather than stocks.
“We're encouraged by the number of people who are accessing the financial system for the first time through Robinhood,” said Vlad Tenev, co-founder and CEO of Robinhood.
Though Robinhood, which allows investors to buy and sell leading digital currencies such as Bitcoin, Dogecoin, and Ethereum, has brought commission-free stock trading to a growing number of new investors, it has benefited greatly from the cryptocurrency boom. The business model of Robinhood is based on routing orders to market makers and taking a percentage of the order value.