Robinhood, a well-known trading platform that does not charge commissions. The crypto revenue generated by Robinhood plummeted by 78% in the third quarter of 2021, compared to the previous quarter. Compared to the last quarter’s revenue of $233 million (approximately Rs 1,745 crores), Robinhood made $51 million (about Rs 382 crores) in Q3. The exchange blamed Dogecoin, the meme-based cryptocurrency that exploded in popularity earlier this year and helped shoot up customer sign-up numbers for the steep drop in price.
In May 2021, the price of Dogecoin increased by 900 per cent, reaching an all-time high of $0.7376. (roughly Rs. 55.33). Prices have dropped dramatically in months since then and have been circling around the $0.20 mark (approximately Rs. 15) in recent weeks. Because Dogecoin (DOGE) accounted for 62 percent of Robinhood’s total digital asset trading revenue in Q2. Its decline in popularity undoubtedly contributed to a decrease in its revenue in the subsequent quarter.
This quarter, Robinhood earned $365 million (approximately Rs. 2,738 crores), down from the $565 million (about Rs. 4,238 crores) it made the previous quarter but still more significant than its Q3 earnings last year. Revenues are up 35% year-over-year in the third quarter, with crypto transaction revenues rising 860% from the same period in 2020. According to company officials, more than 1 million users have already signed up for the business’s future crypto wallet.
Market volatility, retail trading behaviour, and unexpected market occurrences may all impact Robinhood’s operations in the coming quarters, according to the company. Following its initial public offering (IPO) on July 1, Robinhood’s shares dropped 8.4% to $36.25 (approximately Rs. 2,719) in after-hours trading, falling below its IPO price of $38 (about Rs. 2,850).