Robinhood Crypto Revenue Falls 78% as Dogecoin Frenzy Wears Off

Oct 26, 2021 | Decrypt News | 0 comments

Robinhood is discovering the downside of the crypto market’s famous volatility. The company on Tuesday revealed that its crypto revenue fell to $51 million in the third quarter of this year—a 78% decline from the $233 million it notched in the second quarter, though still up considerably from the $5 million it earned a year ago.

The decline was driven in part by a fall-off in demand for Dogecoin, which exploded in popularity in the first half of the year, and helped propel record sign-ups at Robinhood.

“In Q2, the story was about crypto, especially Doge,” said CFO Jason Warnick in a call with reporters, adding that customers’ focus shifted more to equities in the third quarter.

Warnick described the crypto market as “idiosyncratic,” and added that the company intends to invest in crypto over the long-term even it was impossible to make accurate revenue forecasts.

Warnick also noted that more than 1 million customers have signed up for Robinhood’s soon-to-be-launched crypto wallet.

Those sign-ups came as a bright spot in what was otherwise a rough quarter for Robinhood, which first began trading as a public company earlier this year.

Meanwhile, customers have been pressing Robinhood, which has emerged as rival to crypto giant Coinbase, when it will add more crypto. On a message board platform where it fields questions for investors, the most popular one noted that Robinhood has been slow to add new tokens and asked if the company plans to add the novelty currency Shiba Inu by years end.

Warnick hinted that the wait may continue, citing increased regulatory scrutiny of crypto, and the possibility that some tokens may be deemed to be securities.

Overall, Robinhood earned total revenues of $365 million in Q3, up from the same period a year ago, but down from the $565 million it posted last quarter. For the quarter, the company posted a loss of $1.37 billion, nearly all of which stemmed from one-time stock awards tied to its initial public offering.

Robinhood’s share price, which had been trading at around $39, fell over 7% in after-hours trading.

This story will be updated with more details.

News Source from Decrypt.co

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