Even dogecoin, whose fans have been trying to
help it shed its image as a joke cryptocurrency,
soared. It got to 74 cents in May after starting
the year at roughly half a penny. The majority of
Robinhood’s crypto-related revenue last quarter
came from dogecoin, at 62%.
But cryptocurrencies are notoriously volatile, and
their prices have continued to swing sharply since
hitting those peaks. Bitcoin has since fallen back
toward $45,000, and dogecoin has more than
halved to roughly 30 cents.
That could hinder Robinhood’s revenue growth
going forward. The company said that its
revenue will likely drop from the second quarter
to the third.
“We expect seasonal headwinds and lower
trading activity across the industry,” Chief Financial
Officer Jason Warnick said in a conference call
following the release of the quarter’s results.
Trading for brokerages is typically busiest in the
first half of the year, before fading in the second
half, he said. Robinhood’s revenue also does best
when markets are volatile and customers are
trading a lot, and the first two quarters of the year
were punctuated by extreme volatility. In the
first quarter, GameStop and other “meme stocks”
soared to heights that professional investors called
irrational, and cryptocurrencies had their own pop
in the second quarter.
Worries about potentially slower growth helped
send Robinhood shares down 8%, to close at
$49.80. Such swings are nothing new in the stock’s
young life.
Shares of Robinhood, which is based in Menlo
Park, California, have veered between $33.25 and
$85 since they began trading at $38 on July 29.