Robinhood’s crypto revenue increased 45-fold in second quarter to $ 233 million

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Commemorative dogecoins on display in Yichang, China on May 14, 2021.

Barcroft Media | Barcroft Media | Getty Images

Robinhood said its crypto revenue made up more than half of all transaction-based revenue in the second quarter, as retail investors turned to the app to buy bitcoin, ethereum and others. digital currencies.

In its first earnings report since its IPO last month, Robinhood said its revenue from crypto transactions was $ 233 million, up from $ 5 million in the quarter last year. Crypto accounted for 52% of transaction-based revenue, up from 17% in the first quarter and 4% in the fourth quarter of last year.

The company also noted that more than 60% of cumulative net funded accounts traded in cryptos during the quarter.

“The quarter ended June 30, 2021 is the first quarter that a greater share of new clients made their first transaction in crypto rather than in stocks,” Robinhood said in the income statement.

While Robinhood has grown in popularity by offering free stock trading to a new generation of investors, the company has also been a big beneficiary of the boom in the cryptocurrency markets. The app allows investors to buy and sell seven digital currencies, including bitcoin, bitcoin cash, dogecoin, ethereum, and litecoin.

Cryptocurrencies experienced a particularly volatile second quarter. The price of bitcoin has plunged more than 40% after a huge rally in 2020, although it has since recovered much of that value. Ethereum, meanwhile, rose about 18%, and memes-inspired dogecoin more than quadrupled in value.

Robinhood said in its IPOprospectus that dogecoin accounted for 34% of its revenue based on cryptocurrency transactions in the first quarter, up from 4% in the fourth quarter. Much of that increase coincided with a barrage of tweets about the dogecoin from Tesla CEO Elon Musk.

Robinhood even included a specific risk in its prospectus-linked dogecoin, noting that its business could be affected “if the dogecoin markets deteriorate or the price of dogecoin goes down.” The company did not break down specific currency revenue in its second quarter report.

Robinhood makes money in 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.

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

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