Cryptocurrency activity is booming as more than 60% of Robinhood users trade in digital currencies
Robinhood’s revenue surged to $565 million, during the second quarter of 2021, owing to an abundance of cryptocurrency trading. Robinhood’s earnings via crypto trading skyrocketed in the second quarter with over 60% of its users initiating transactions in decentralized currencies.
Robinhood cryptocurrency activity surges in the second quarter of 2021
As per the second-quarter financial outcomes, published on August 18, the firm produced $233 million from cryptocurrency trading services alone. The net transaction-based revenue generated was a whopping $451 million out of which more than half was due to a surge in cryptocurrency transactions. This revenue, made from merely crypto trading, exceeded the $5 million increase that was generated in the second quarter in 2020.
62% of the crypto revenue was generated by the meme-inspired digital coin, Dogecoin. Cryptocurrency reported 52% of transaction-based revenue, a major increase of 17% in the first quarter and 4% in the fourth quarter of 2020.
While Robinhood became popular by getting in free stock trading to a brand-new generation of investors, the company has also been a big recipient of the surge in cryptocurrency markets. The app allows users to trade seven digital currencies in total – Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, Litecoin, Bitcoin SV, and Ethereum Classic. Cryptocurrencies have had a predominantly unpredictable second quarter. Bitcoin leaped to a 40% increase, Ethereum soared 18% above its preceding value, and dogecoin more than quadrupled in value.
Dogecoin has contributed to 34% of the cryptocurrency transaction-based revenue in the first quarter. The number increased significantly as dogecoin’s value continued to skyrocket.
The revenue report has been the first of its kind since Robinhood Markets Inc. became a public company. The $565 million revenue is a 131% increase compared to the revenue generated in the second quarter of 2020 which was estimated to be around $244 million. Active users were nearly doubled, from 10.2 million to 21.3 million. The entire Robinhood cryptocurrency assets almost doubled to $22.7 billion from $11.6 billion.
The top line and bottom-line results posted by Robinhood are as follows:
Revenue – $565 million (131% year over year increase)
Net Loss – $502 million ($2.16 per diluted share)
