Double The Doge, Double the Fees:
In Q1 17% of Robinhood’s transaction-based revenue
(AKA not selling order flow) was from crypto with 35% of that from Dogecoin. In Q2, 50% of transaction-based revenue came from crypto, 62% of which came from Dogecoin. Holy hell.
Catching up to where the puck is: In Q2, 60% of Robinhood’s cumulative net-funded accounts traded crypto in the quarter. Compare this with Robinhood’s pretty abysmal crypto platform which boasts 7 assets:
- Bitcoin – The classic, but very vanilla for investors
- Bitcoin Cash – mostly unused
- Bitcoin SV – no comment
- Dogecoin – memecoin
- Ethereum – Also great, but not as exciting as DeFi or other tokens
- Ethereum Classic – mostly dead
- Litecoin – abandoned
Ultimately, while Robinhood has made significant revenue from Dogecoin, the adorable memecoin will not continue as the key to Robinhood’s crypto success.
Messari Mainnet Revelations:
Robinhood’s crypto strategy has been fairly underwhelming to date, but last week at Messari Mainnet
, COO of Robinhood Crypto Christine Brown and CTO of Robinhood Crypto, Johann Kerbrat, revealed that $HOOD is 10xing its crypto strategy. CTO, Kerbrat revealed the engineering team has 10x’d in size and the entire crypto team in general.
Come for the deep value, stay for the fun: Some insights from the Robinhood Crypto Messari Mainnet discussion:
Moving Your ASSets: Users will be able to move cryptoassets out of Robinhood (which are currently held as 1s and 0s in a database)
Race to Zero: Robinhood is going to keep its zero-fee strategy, potentially forcing giants like Coinbase to reduce or eliminate their fees.
MOAR Tokens: On listing new tokens, “We aren’t going to share a timeline of what coins and when, until later this year” - Christine Brown, COO at Robinhood Crypto. Coinbase, Kraken, Gemini, and other exchanges have opened their listing floodgates, I expect Robinhood to do the same.
Wen Staking?: “We can’t tell too much about our roadmap, but something I’m really excited about is staking in general” - Johann Kerbrat, CTO of Robinhood Crypto. Staking will take longer, but it looks like Robinhood understands the importance of adding this feature.
Give the people degens what they want: “Robinhood is the gateway, if you want to acquire a coin and go acquire an NFT, we’re going to support that. We have a healthy appetite of what we’re going to tackle in 2022 and a lot of that will come from our customer demand, what do they want.” - Christine Brown, COO at Robinhood Crypto. Robinhood is clearly having FOMO about missing out on DeFi, NFTs, and is looking to expand its offerings.
Right Rudder!: After having put its crypto strategy on the backburner in order to IPO smoothly, Robinhood is finally realizing that a majority of its future growth lies within crypto. However, the scrutiny of a large exchange, the GameStop fiasco, and general distaste from regulators might make turning the crypto trajectory of the $HOOD ship challenging. It’s possible that Robinhood will (hopefully) create a race to zero in crypto exchange fees if they’re able to increase the list of cryptoassets they support. Still, Robinhood is going to need to play some expedited catch-up – via building or acquisitions – if it looks to compete with the likes of existing exchanges.