As part of its preparations to go public, online brokerage firm Robinhood filed a Form S-1 with the Securities and Exchange Commission (SEC).
Key highlighting points:
- Dogecoin trading is responsible for 34% of Robinhood’s cryptocurrency earnings.
- The popular trading software has filed for an initial public offering (IPO) valued up to $100 million.
- Transaction-based earnings collected from crypto trading account for 17% of the firm’s total revenue.
Dogecoin steals the show from Robinhood.
According to a document filed with the Securities and Exchange Commission, Robinhood, a popular trading app for stocks, options, gold, and cryptocurrencies, has filed for a public offering worth up to $100 million. On the Nasdaq, its shares would be listed under the ticker name HOOD.
The startup has been a popular crypto trading site, particularly among millennials, and could one day compete with Coinbase for digital asset trading. With 9.5 million users trading digital assets in the first quarter of 2021, the company has established itself as a major participant in the crypto sector.
Robinhood made $7.5 million in profit on $959 million in revenue in 2020, thanks to the rise of popular meme cryptocurrencies. The amount of Bitcoin and other digital assets held on behalf of its customers has increased dramatically in the firm’s crypto business.
By March 31, the value of Robinhood’s crypto holdings had risen to roughly $11.6 billion, up from $480 million a year before. In the first quarter of 2021, bitcoin trading accounted for 17% of Robinhood’s total income.
Dogecoin accounted for 34% of total digital asset trading revenue, while Bitcoin accounted for 6% of total revenue. This would be a problem, according to the brokerage business, if demand for Dogecoin transactions drops and is not replaced by fresh demand for other cryptocurrencies.
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Negative attitude and impressions of Dogecoin, as well as the coin’s greater availability on other crypto trading platforms, could lead to a drop in demand for the coin on Robinhood.
Aside from Bitcoin and Dogecoin, Robinhood’s crypto services cover a number of digital assets. Customers are now limited in their ability to shift cryptocurrency assets off from their platform. According to Robinhood Crypto COO Christine Brown, this is expected to change in the near future.
The trading firm first declared its intention to go public in March, but the process was hampered by legal ambiguity with the Securities and Exchange Commission (SEC) concerning cryptocurrencies and other parts of its operation.