Trading platform, Robinhood has revealed that decline in the demand of memecoin, DOGE on its platform can pose a risk to the survival of its business. This was revealed in the S-1 securities registration form for its IPO with the Securities and Exchange Commission on Thursday 1st, July, 2021.
The company stated in the document that its major revenues came from the high demand and volumes of trading the memecoin in the first 4 months of this year, 2021. These times were characterized by the DOGE frenzy and saw crypto exchanges listing the coin not to lose out on the volume for profit. Robinhood probably leveraged on the opportunity too.
DOGE wasn’t the only memecoin supported by the trading platform. The document shows a percentage of its revenue came from memecoin SHIBA Inu. The company’s revenue saw a significant rise from about 4% in 2020 to 17% in 2021, thanks to Crypto transactions. Robinhood supports trading of 7 cryptocurrencies on its platform including Bitcoin and Ethereum.
Robinhood at Risk if DOGE’s Demand isn’t Replaced
The company went on by stating that Dogecoin’s volume is responsible for the spike in their revenue and if the declining demand isn’t replaced, their business could take a hit;
“A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in 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.
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