Crypto represents 52% of the company’s turnover – Quartz

Robinhood investors love crypto.

In its first report on earnings as a public company, the investment platform said cryptocurrency trading accounts for 52% of its main source of revenue – the sale of user orders for options, stocks and cryptocurrencies to market makers like Citadel Securities – down from just 0.03%. in the second quarter of last year. Dogecoin, which was originally created to poke fun at the crypto hype, accounted for 62% of the crypto trading volume, the company said on August 18.

“Robinhood is now clearly on the crypto trading map,” Jason Warnick, Robinhood CFO, said on a conference call.

Cryptocurrency revenue soared 4560% to $ 233 million in the second quarter, from $ 5 million in the same period last year. Equity trading income, meanwhile, fell 26% to $ 52 million from $ 71 million. As a result, the share of equities in income increased from 12% to 38%.

Overall, transaction-based revenue reached $ 451 million in the second quarter, up 141% from $ 187 million.

Robinhood warns of upcoming downturn in business activity

But the company said it expects “seasonal headwinds and lower trading activity across the industry,” which will lead to lower revenues and fewer new accounts funded on the trading app. in the third trimester. In June, trading volumes on major crypto exchanges fell by more than 40%.

Robinhood executives said the volatile nature of the crypto market makes it “incredibly difficult to predict when these times will continue or recur.” Still, Warnick added that cryptocurrencies have become more common and more accepted than they have been in the past. The company sees crypto as a “long-term business” and has grown its crypto team, he said.

Robinhood shareholders also appear to be interested in crypto. Ahead of its earnings call, the California-based company gathered questions from shareholders, ranging from whether investors can get a Robinhood hat and hoodie to whether the company will pay a dividend in the future.

Most Voted Question: Does Robinhood Get a Crypto Wallet? On Wednesday, the company said achieving this on a large scale was difficult in part for security reasons, but it’s something it will focus on.

Clarification: An earlier version of this story incorrectly referred to the market maker Citadel Securities as Citadel, which is a hedge fund.

Barbara M. Stokes