Stock trading and investing app Robinhood has revealed that it’s considering adding cryptocurrency to its balance sheet. In a statement made by COO Christine Brown, Robinhood might follow in the footsteps of rival company Coinbase to add virtual currencies to its balance sheet. Brown revealed this on Wednesday.
The COO also disclosed that the ETF trading company was looking into extending the number of digital assets at its disposal to become a one-stop-shop for traders. Robinhood reportedly announced that it would soon roll out support for virtual asset wallets. Since the news came to light, its shares have surged 6%.
Cryptocurrency Has Become the Bread and Butter of Robinhood’s Business
Virtual assets have become a crucial part of the company ever since it integrated a crypto trading platform. Cryptos account for the majority of its revenue in 2021, with Dogecoin responsible for about a quarter (26%) in Q2.
In total, Robinhood made $233M from trading cryptos in Q2, which further represents a significant share of its total $565M revenue realized from transactions. As opposed to stocks, most first-time traders in the app placed their trades on virtual assets. Due to the large interests in trading cryptocurrency, Robinhood could finally balance the book and offset declining interest rates in the stock trading section.
As opposed to Q2, Robinhood only recorded 17% from crypto trading in Q1, with the meme coin representing 34% of the crypto trades placed. The commission-free app might release Q3 revenue by October.
Robinhood Follows in Rival’s Footsteps
Robinhood’s crypto move is similar to Coinbase’s. In late August, Coinbase revealed its plan to invest in a variety of virtual assets. The top exchange in the United States disclosed that it would invest about $500M in cash and equivalent into cryptos, such as Ethereum, Bitcoin, and tokens from DeFi systems.
In Q2, the company realized a net income of $1.6B. Considering the amount of money it made, it could hold cryptos worth billions of dollars within a few years. As of December, Coinbase held $316M worth of virtual assets, with BTC accounting for 63%. The percentage amounted to $230M. Considering that Robinhood also made so much money from trading cryptos, the company could also own a significant amount of cryptos within a few years.
Robinhood is one of the few brokers that allow the trading of cryptocurrencies and buying fractional shares. The free-trading app, which allows trading without paying any commission, launched its IPO in late July. After a shaky start, the company’s shares began to soar, although it was short-lived because of the emergence of other trading apps.