Robinhood says dogecoin accounted for 34% of crypto revenue in Q1 – .

Robinhood says dogecoin accounted for 34% of crypto revenue in Q1 – .

Robinhood, the company that has helped popularize stock trading in recent years, has seen such growth in dogecoin transactions this year that it has included a specific risk in its cryptocurrency-related IPO prospectus. .
The company said in its IPO on Thursday that the memes-inspired token accounted for 34% of its revenue based on cryptocurrency transactions in the first quarter. This is up from 4% in the fourth quarter.

Much of that growth has coincided with a barrage of dogecoin tweets from Tesla CEO Elon Musk, who tweeted “Release the Doge! “

Revenue from Dogecoin accounted for 6% of the company’s overall revenue during the period, while crypto accounted for 17%. The trading app offers seven different digital coins, including bitcoin, ethereum, and litecoin.

Robinhood said its business could be affected “if dogecoin markets deteriorate or the price of dogecoin declines, especially due to factors such as negative perceptions of dogecoin or increased availability of dogecoin on other trading platforms. of cryptocurrency ”.

Crypto trading, which Robinhood first introduced in 2018, has exploded in recent years. Robinhood makes money through crypto by channeling orders to market makers who the company says offer “competitive prices” and take a percentage of the order value.

Overall, crypto assets on the platform soared in the first quarter year over year, from $ 480.7 million to $ 11.6 billion. Total revenue rose 309% during the period to $ 522 million, from $ 128 million a year earlier.

But scaling has proved problematic at times, according to the filing. For example, partial service outages and degraded service during times of high crypto transaction volume were a problem in mid-April and early May.

Similar to PayPal, which does not allow its customers to transfer crypto holdings to other digital wallets, Robinhood does not allow users to deposit or withdraw cryptocurrencies in or out of the app, although it does said he could add such functionality down the line.

Although Robinhood does not name any rivals on the file, the company acknowledges that it operates in “very competitive” markets alongside “discount brokerages, established fintech firms, venture capital-backed fintech firms, banks, cryptocurrency exchanges, asset management companies and technology platforms. “

In addition to PayPal, Coinbase, which went public earlier this year, and Square’s Cash app are two popular services used by U.S. consumers to buy and sell cryptocurrency.

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