Robinhood Warned Its Recent Growth Was Heavily Reliant On Dogecoin

Robinhood warned its recent growth was heavily reliant on Dogecoin as the company announced earlier today to which we are reading more in our Dogecoin news.

As it is preparing to go public, online brokerage service Robinhood filed a Form S-1 with the SEC and most of the company’s growth was connected to the rise of Dogecoin. If the demand for DOGE drops, the document warned that it will be heavily affected. Along with the role in clarifying some of the specifics around the public offering, the S-1 lays out some of the risks associated with investing in the company’s stocks. The filing reads:

“A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected.”

17% of the company’s revenue in Q1 came from fees on crypto trades and 34% of the revenue came from Dogecoin alone. The overall revenues are up this year too as Robinhood took $522 million in Q1 alone. Dogecoin was developed in 2013 as a way of making fun of bitcoin but since evolved into a crypto giant. It is now the sixth most valuable cryptocurrency with a market cap of nearly $33 billion. Robinhood established itself as the main app of choice for investors that are looking to trade stocks as memes and it even had a natural pivot for many of the investors with the price surging to $0.03.

The company’s filings suggest the negative perceptions of Dogecoin and the increased availability of the coin on other trading platforms that will suppress the demand for the coin on Robinhood. Coinbase is now the largest crypto trading platform that listed Dogecoin but while happy to ride the wave, the crypto ambitions extended much beyond DOGE as it added a new COO for its crypto arm in April and held $11.6 billion in crypto at the end of the first quarter.

As reported recently, the company will pay record fines for making significant harm to customers, and the fine reaches $70 million due to outages and misleading communications relating to the trading platform as Robinhood warned its users.

Source: https://www.dcforecasts.com/dogecoin-news/robinhood-warned-its-recent-growth-was-heavily-reliant-on-dogecoin/