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Robinhood just became a crypto company. If it does things right, it won’t be for long

August 19, 2021, 2:40 PM UTC

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In the midst of cryptocurrency’s first Great Mainstreamification of 2017, Robinhood CEO Vlad Tenev predicted millennials would continue to prefer equities over Bitcoin and its ilk.

“I wouldn’t say that we’re anticipating a massive shift from stocks to cryptocurrencies,” he told CNBC at the time. “We don’t see the equities market going away anytime soon.”

It’s a strange snapshot in time, because on Wednesday, the stock-trading app maker went from, well, that, to kind of… becoming a crypto company. Riding the frenzied interest in all things Bitcoin-related, Robinhood said that roughly 52% of its transaction-based revenues—its main line of business—came from cryptocurrencies in the second quarter of 2021. That’s up from just 3% from the same quarter a year earlier.

“In fact, this is the first quarter where we saw a larger share of new customers place their first trade in crypto rather than in equities,” Tenev said in the earnings call Wednesday, with CFO Jason Warnick noting: “We saw a decline in equity activity as our customers’ interest rotated from equities to crypto.” 

And there’s more:

  • 60% of Robinhood accounts dabbled in crypto in the second quarter.
  • 62% of its revenue from crypto-trading was attributable to Dogecoin, the Shiba Inu-inspired coin that started as a joke. 
  • At $233.1 million in the quarter, crypto revenue also represents Robinhood’s largest overall source of revenue in those three months, accounting for 41% of the total. Traditionally, options-related revenue was Robinhood’s largest single source of top-line dollars.
  • Growing 4,282% from the same quarter a year earlier, cryptocurrency revenue was the main driver of the company’s growth in the period.

The flipside to all of this however is that crypto can be highly volatile. Perhaps in part due to those concerns, shares of the company dipped and remained down by about 8% in early trading Thursday.

So even as Robinhood continues to grow its crypto business, what it really wants to be is not a crypto company per se. Instead, it’s looking for steadier streams of revenue and diversification in part to bulwark against risks like the one mentioned above. Here’s CFO Warnick again, in answering analyst questions on the call. 

“We want our customers to look to Robinhood’s debit card as their primary form of payment,” he said. “We want to be the single place that our customers go to for all things money. And that will lead naturally to diversification in our revenue streams over time.”

Meaning yes, crypto drove its growth this quarter. But if Robinhood plays its cards right, it won’t be a “crypto company” for long.

Lucinda Shen

Jessica Mathews compiled the IPO and SPAC sections of this newsletter.


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- One, a Sacramento, Calif.-based banking startup, raised $40 million in Series B funding. Progressive Investment Company led the round and was joined by investors including Obvious Ventures, Foundation Capital, and Core Innovation Capital.

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- Webiny, a platform for building apps and websites, raised $3.5 million in seed funding. M12 led the round and was joined by investors including Samsung Next, Episode 1, and Cota Capital.

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- Solum Partners acquired a majority stake in Monte Vista Farming Company, a Denair, Calif.-based almond sheller and processor. Financial terms weren't disclosed.


- Kohlberg acquired Myers EPS, a Mt. Kisco, N.Y.-based emergency lighting manufacturer, from Graham Partners. Financial terms weren't disclosed.

- Linktree acquired Songlink/Odesli, a Palo Alto, Calif.-based automated music link aggregation platform. Financial terms weren't disclosed.


- The CME Group (Nasdaq: CME) denied reports from the Financial Times that it was looking to acquire Cboe Global Markets (BATS: CBOE), a Chicago-based options exchange, for $16 billion.

- Commure, backed by General Catalyst, acquired PatientKeeper, a Waltham, Mass.-based health record software company, from HCA Healthcare. Financial terms weren't disclosed.


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- Yitu Technology, a Shanghai-based A.I. and facial recognition company, is considering a Hong Kong IPO, per Bloomberg, which could value the company at around $4 billion. The firm formerly attempted to list in Shanghai.

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- Iris Energy, an Australian Bitcoin mining firm, filed confidentially for an IPO in the U.S., per Bloomberg.


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- FinTech Collective, a New York-based venture capital firm, raised $250 million across two funds.

- Global From Day 1, a New Zealand-based venture capital firm, raised $130 million for its third fund.

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