Doge Revenues Tank on Robinhood. Why?
Dogecoin and the mania surrounding it earlier this year was a major catalyst for Robinhood’s recent success, which eventually led to them going public in July, valued at 32 billion. All this was due in large part to the massive revenues generated through retail buying Doge. In fact, Doge accounted for a whopping 32% of Robinhood’s total revenue in Q2. That number has fallen drastically, all the way down to 8%.
This Friday, the company disclosed that Doge transactions represented 8% of their net revenues in Q3, which is still no small potatoes, as Robinhood netted $364 million in the quarter, which shows the growing popularity of retail investing and the relative strength of Doge. This is especially true in light of the fact that many critics say the meme token is completely worthless. But as we all know, memes can make money, and can be money–we are in a new era.
Regardless, this shows Doge didn’t disappear to zero after Saturday Night Live with Elon, and while these numbers show a waning of Doge mania, it is still remarkably resilient–still a lot of diamond hands. However, falling from 32% to 8% is quite the tanking, and many wouldn’t be surprised to hear it–it’s just a meme token after all, right? But Doge was more than that, it was a rare phenomena. Just as an example, in the first half of the year Doge “accounted for 62% of Robinhood’s crypto transaction-based revenues.” That’s a large majority.
Now, Robinhood doesn’t offer that many crypto assets, only seven, but still. Doge ginned up a frenzy among retail, it was a wild moment. So Doge transactions have waned, but the memes have not. Shiba, which is a play on Dogecoin, or the joke of the joke, went parabolic last week, and it had to do with Robinhood. “A Change.org petition created to get Robinhood to list the crypto has so far amassed 416,000 signatures out of its half million goal.” It is quite the strange event to cause a 100+% run-up, and many speculate meme pumps are a sign of an overheated market.
In fact, the whole rise of Shiba is downright flummoxing to many in the space–some would even say intellectually insulting to projects who have actual fundamental, practical value. Shiba is up 60,000,000% over the past year–no one can say that is not absolutely bonkers, and actually makes people quite wary of the space and the market itself. The market appears to be underweighting and undervaluing fundamentals, decentralization, use case, supply; you name it. Everything is sort of out of whack. Shiba is a reflection of how powerful “going viral” can be in this plugged in world. Value is viral, one may say. Edward Snowden summed up the current market aptly, and yes, it went viral.
i say this with love:
if you got talked into exchanging your hard-earned savings for some new dog money because a meme said you'd get rich, please carefully consider your odds of outsmarting a market that sold to you its stake in *not even dog money but a CLONE of dog money*
— Edward Snowden (@Snowden) October 31, 2021
Robinhood hasn’t said whether or not they will add Shiba, but they must be chomping at the bit to do so, as the revenues would obviously be juicy. And Robinhood needs them, because with Doge fading, and meme stocks waning, Robinhood’s stock has suffered. According to Barrons, “more Robinhood Markets users left the app or sold off their holdings than opened new accounts in the latest quarter, a sign that the meme stock frenzy that fueled the company’s growth has lost its steam.”
The day after the results for Q3 were released, Robinhood stock dropped by 11%. Their monthly active users are down, and funded accounts down, too. The biggest irony is that, investors in Robinhood’s stock saw the fundamentals taking a hit, and the easiest way for Robinhood to improve those fundamentals, is to add a coin, Shiba, with largely zero fundamentals at all, by design…strange times. So while Doge is fading and meme stocks are too, Shiba is apparently very popular, and especially “viral”.
How long it will last? It is hard to say. I do think people are looking forward to the day, though, where money will flow into the better assets in the space, as fun as memes are, it’s hard to imagine Shiba being worth more than Robinhood, but that happened over the weekend. As the Chinese proverb goes “may you live in interesting times.” I guess is there one thing we can all agree on: everyone loves dogs. Maybe there is some wisdom to be gleaned from that.
$SHIB is literally worth more than Robinhood right now.
Oh…… the irony…….
— Shiba Inu News (@ShibalnuNews) October 28, 2021
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Text source: CryptosRus
