Dogecoin is now Robinhood’s biggest crypto money maker. Trading from the meme coin accounted for 62% of crypto revenue for the trading app in the second quarter of the year. The coin had grown to popularity when people had needed a quick way to buy the coin. This was following the growing popularity of meme stocks like GameStop at the time. Which had eventually spilled into meme coins later on.
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Robinhood had become very popular as the leading place to trade the GameStop stocks during the boom. Then when Dogecoin started rallying, users had flocked to the trading app to invest. Leading to tremendous growth on the part of Robinhood. The app had fallen out of favor when trading was blocked on meme stocks and coins. But a good percentage of traders continue to favor the trading app. Furthermore, it is usually a starting point for new and young investors just starting out with investing.
Dogecoin trading has grown in the app. As the price has once again begun to rally, investors are pouring back into the asset. Crypto trading has grown on the app. And trading in Doge has made up the majority of crypto trading being carried out on the platform.
Dogecoin Leads Crypto Trading
Robinhood reported that crypto trading now made up 50% of its transaction-based revenue for the second quarter. An over 250% increase from the reporter 17% in the first quarter. The growth is synonymous with the growth of cryptocurrencies among investors. The market has seen increased interest. And so, this has spilled over into platforms where crypto trading services are being carried out.
Doge price dives below $0.30 again | Source: DOGEUSD on TradingView.com
Moving on, Robinhood also reported that more than 60% of accounts on the app had traded crypto. Just in the second quarter alone. With Dogecoin accounting for 62% of all the crypto trading carried out by users. Revenue from crypto trading had also grown. The reported revenue for crypto trading in the second quarter was $233. Up 4,500% from $5 million from the last quarter. Making up 52% of revenue from transaction-based revenue.
In total, the company’s total net revenue for the second quarter was $565 million. Up 131% compared to its second-quarter in 2020.
Robinhood Rising Above The Noise
The year 2021 has not been the easiest for the trading app. Various issues ranging from regulation to unsatisfied customers have rocked the company. Robinhood was fined $70 million back in June for causing “significant harm” to customers. The case was triggered by the suicide of a 20-year-old Robinhood customer who had taken his life. Amongst other allegations that were levied against the company by FINRA.
Another pressing issue is the problem of crypto ownership on the platform. Crypto bought on Robinhood does not belong to the users who are purchasing them. There is no wallet feature on the Robinhood. So there is no way for the traders to transfer out the crypto on Robinhood like they would on other exchanges. Buying crypto on the platform is often compared to trading a crypto derivative. While users might think they are buying the coin, they are really just placing bets on the price of the meme coin.
Although attention has been called to this, crypto traders still continue to favor the platform for trading crypto. Most likely due to the ease with which they can trade crypto on the app.