Robinhood, the American exchange, warns that it could be harmful if interest in Dogecoin wanes, saying the cryptocurrency was responsible for 34% of its revenue in the first quarter.
The commission-free trading app warned its investors on Thursday (1) that their luck could be linked to a cryptocurrency that started out as a joke.
When first revealing its finances during the IPO process, Robinhood told the SEC that Dogecoin accounted for 34% of its revenue in the first quarter of 2021.
The explosive growth in Robinhood’s revenue from dogecoin and other cryptocurrencies earlier this year also coincided with a rapid rally for the market as a whole.
“Any slowdown in demand (from Dogecoin) – the company said – could adversely affect our financial results.”
“A substantial part of the recent growth in our net income from cryptocurrency transactions comes from transactions with Dogecoin,” she added in her S-1 file filed with the Securities and Exchange Commission (SEC).
“If the demand for transactions on Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected,” he added.
Its total assets increased 23 times in the first quarter compared to the same period last year. Also in the first quarter, Robinhood’s total revenue increased 309% to $522 million.
The cryptocurrency meme, protagonist of the whole story, reached a peak in early May. In one month, crypto grew an impressive 1.354%. Consequently, it hit the price of 73 cents on May 7, being applauded by notable supporters, including Tesla CEO Elon Musk.