According to Bloomberg News, there is a difference between Robinhood Markets Inc’s crypto trading revenue proceeds between the second and third quarters and which is found to be staggering. The total crypto revenue was $233 million recorded in the second quarter and $51 million recorded in the third quarter.
Given the fact that there are many options to buying and selling cryptos at present, it is even making payment companies, for instance, Venmo jumping on the bandwagon. The crypto wallet market has reached a point of saturation and a wallet could make Robinhood a one-stop-shop for the retail traders that are interested in dabbling in stocks and cryptocurrencies, reports Bloomberg News.
Another attributable reason for the drop in Robinhood’s crypto-related trading activity is the decline in excessive demand from the retail traders for the company to list Shibu Inu coins on to the platform. As per the last filing, 64% of the revenue from crypto was seen to be coming from Dogecoin.
As of October 27th, 1:52 GMT+5:30 Robinhood Tumbles Blow Price of IPO- Revenue Misses Assessment
Robinhood Markets Inc crumpled while extended trading Tuesday, following reporting of the third quarter revenue fall, which was not as per the estimates of the Wall Street since the transactions related to cryptocurrencies dropped from the earlier period.
Shares of the brokerage dropped to $36.02 at 9.2% at 5:26 pm in New York, which is below the $38 IPO or initial public offering price in July.
Revenue from crypto transactions totaled $51 million, which is a 78% drop from the second quarter, as per a statement from Menlo Park, Robinhood based in California, reports Bloomberg News.
The total revenue recorded was $364.9 million, thereby missing the $423.9 million estimate assessed by 10 analysts in the survey being carried out by Bloomberg.
As far as funded accounts are concerned, it totaled 22.4 million as of September 3oth, which is a little drop as compared to the previous quarter.
The recent quarter tested the potentialities of Robinhood as the retail investors marginalized or carried out their trading activities in moderation following a first half that can be said to be sizzling, triggered by meme stock of January and a Dogecoin rally subsequently.
Robinhood stated that the “muted” trading environment may continue through the end of the year, predicting that the 4th quarter revenue might be below $325 million.
The Chief Executive Officer leading Robinhood, Vlad Tenev already warned in August that there would be a slow down in the trading activity in the third quarter and simultaneously the pace of opening new accounts as well.
The quarterly net loss of Robinhood of $1.32 billion, or $2.06 per share, was due to the compensation of stock-based employees in the period compared to the second quarter, in various segments like compliance, engineering, and customer support.
Crypto is crucial in the growth of Robinhood. Last month, it said that it plans to provide crypto wallets to investors as a tool to send and receive digital currencies. The waitlist for this product has been recorded to be more than 1 million in customer base.
Although, the revenue from crypto plunged considerably as compared to the previous quarter, yet the company recorded a ten-fold rise as compared to the same period last year.
