Popular investment platform Dogecoin reported its financial earnings for the second quarter which revealed more than half of all transaction-based sales came from Dogecoin, a now popular meme-coin.
According to the reports, Robinhood earned $ 233 million in revenue from cryptocurrency-based transactions, a significant rise from the previous year which reported a $5 million revenue. Cryptocurrencies accounted for about 52% of transaction-based revenue, increased by 17% from the previous quarter.
Additionally, the reports revealed that a large portion of new users made their first transactions in cryptocurrencies rather than stocks, with over 60% of cumulative net-funded accounts trading crypto in the quarter. Vlad Tenev, CEO and Co-Founder of Robinhood said in a statement:
“We’re encouraged by the number of people who are accessing the financial system for the first time through Robinhood. We’re happy to expand access through products like commission-free crypto trading, which saw strong growth this quarter among women investors in particular, and IPO Access, which gives customers an opportunity to invest in companies at their IPO price.”
While the company has been faring well in terms of revenue growth, the company disclosed a net loss of $464 million due to a change in the fair value of convertible notes and warrant liability.
Risk factor of Dogecoin
In the Q2 filing with the SEC, Robinhood revealed that over 62% of the profits obtained from cryptocurrency transactions came from Dogecoin, a figure that might harm the company in the future.
The filing noted that the high Dogecoin utilization rate could hurt the business in the future if its market deteriorates and the value of the currency declines.
Dogecoin is a popular memecoin that was originally created as a joke. However, partially due to Elon Musk’s advocacy for the coin, it has recently gained popularity. The dogecoin foundation has recently resumed its activities after Ethereum co-founder Vitalik Buterin joined the foundation as an advisor.
Despite gaining popularity, Dogecoin is still an extremely volatile currency that can have a huge impact on Robinhood’s revenue if it fails to grab demand in the future.