Robinhood cited a large growth in the popularity of cryptocurrency on its platform, reporting today that more new users bought crypto with their first trade rather than stocks in the three months ending June 30. The company also disclosed that more than 60% of its funded accounts engaged in crypto trading during this time.
The news came in the form of a Q2 earnings report, which was Robinhood's first since it became a public company in July.
The report disclosed that Robinhood lost $464 million during the second quarter of 2021—a large number but not indicative of the company's overall performance, since all of that loss came from an accounting adjustment related to a change in value of notes and warrants held by the company.
Robinhood's revenues grew to $565 million in the second quarter of 2021, which was a 131% increase from the same quarter a year ago. Cryptocurrencies accounted for $233 million of that revenue—a huge increase compared to the $5 million in crypto revenue the company pulled in during the second quarter of 2020.
The crypto revenue in Q2 amounted to 41% of Robinhood's overall revenue compared to 17% in Q1. Meanwhile, the meme-based Dogecoin accounted for a full 62% of that crypto revenue—nearly double the share it counted for in the first quarter. (In both quarters, Robinhood listed reliance on Dogecoin revenue among the risks facing the company).
For the three months ended June 30, 2021, 41% of our total revenue was derived from transaction-based revenues earned from cryptocurrency transactions, compared to 17% for the three months ended March 31, 2021. While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended June 30, 2021, 62% of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 34% for the three months ended March 31, 2021
In a statement, Robinhood CEO Vlad Tenev pointed to strong growth in the company's crypto operations and among female users.
“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," said Tenev.
The crypto growth is a bright spot for Robinhood, which suffered negative publicity surrounding its July public offering. The IPO was considered a flop after Robinhood stock fell below its $38 listing price on opening day, though its shares have since recovered and were trading around $50 on Wednesday afternoon. (The price fell around 7% in after hours trading after the company warned growth could slow).
Robinhood has expanded its crypto operations in 2021 and is widely rumored to be planning a stand-alone crypto wallet to compete with rival Coinbase. The company is holding an investors' call at 5pm ET on which CEO Vlad Tenev is expected to answer questions—including about the status of the crypto wallet, which was the top-voted topic on an investor forum hosted by the company.
This story was updated several times with new details.