Robin Hood Markets warned investors on Wednesday that the second-quarter revenue increase fueled by a boom in cryptocurrency trading may not last, According to Al Arabiya.net.
In its first earnings report as a public company, the brokerage said revenue more than doubled to $565 million, but a large portion of that was driven by cryptocurrencies. Primarily a Dodge Coin that originated as a joke.
California-based Robin Hood's shares are down 8.2% to $45.70 in extended New York trading, after a 31% rise since the company's initial public offering on July 29 .
We expect seasonal headwinds and lower trading activity across the sector to reduce revenue and significantly reduce the number of new funded accounts in The third quarter.
Crypto revenue totaled $233 million in the second quarter, up 4560% from the previous year, underscoring how the ever-changing preferences of individual merchants play a critical role in the amount of Revenue earned by the company.
This number exceeded revenues from trading stocks and options combined, and Dodge Coin accounted for 62% of cryptocurrency revenues in that period.
(Robin Hood's) loss in the second quarter of $ 502 million, compared to a profit of $ 58 million in the second quarter of last year, when retail investors returned to Stocks after a period of recession affected by the epidemic.
The rise in cryptocurrency revenue also reflects increased investor appetite for virtual currencies this year. More than 60% of Robin Hood's accounts traded in cryptocurrency in the second quarter.
Bitcoin reached record levels last April, hovering above $34,500 at the end of June, while the company's funded accounts reached 22.5 million customers as of June 30, compared to about 9.8 million a year ago, according to the statement.
