Robinhood’s declare to fame within the crypto trade has been its meme coin providing to US trades, extra particularly permitting Dogecoin buying and selling within the meme coin growth of 2021. Since then, the platform has grown to develop into one of the outstanding for buying and selling meme cash, and its Dogecoin balances have grown to the purpose that it has develop into regarding for analysts attributable to how a lot of the altcoin the platform at present holds.
Robinhood’s Dogecoin Holdings Rival Bitcoin
Just lately, Beth Kindig, a researcher and analyst at IO Fund, revealed that the focus of Dogecoin holdings on Robinhood was extremely excessive. In an X (previously Twitter) put up, Kindig revealed that this excessive focus has additionally seen buying and selling volumes on the alternate correlate with the decreased volatility and volumes for Dogecoin basically.
In a weblog put up on the IO Fund web site, the market analyst additional elaborated that Dogecoin really made up 62% of the overall crypto transaction quantity on the buying and selling platform. Apparently, crypto transactions make up 38% of the overall transaction income of Robinhood, which means that Dogecoin makes up a great majority of the crypto transaction income.
On the similar time, there has additionally been a rise within the DOGE transaction quantity on the alternate, particularly compared to different crypto belongings on the platform. For instance, Dogecoin noticed a 122% improve in buyer balances quarter-over-quarter. In the identical time interval, Bitcoin, the most important cryptocurrency by market cap, noticed a 68% improve in safeguarded BTC belongings.
What this reveals is that Dogecoin buying and selling has develop into an intricate a part of the practice platform’s enterprise regardless of providing different belongings for buying and selling. Whereas this has labored in occasions of peak curiosity, the market analyst doubts if this can be a good factor in the long run for the corporate.
Is Such Excessive Focus A Good Factor?
Within the weblog put up, IO Fund questions the viability of Robinhood’s enterprise, given the excessive dependency on Dogecoin buying and selling. Stating that crypto buying and selling volumes have been sliding month over month, it questions the sturdiness of Robinhood’s transaction income progress.
Moreover, along with Dogecoin, there has additionally been some uncertainty surrounding the platform relating to come of its listed tokens. Because the US Securities and Alternate Fee (SEC) has already despatched a Wells Discover to the alternate, it stays to be seen which cryptocurrencies the regulator will deem to be securities and demand to cease buying and selling.
Nonetheless, if Dogecoin’s quantity rises within the open market as correlation stays excessive, then Robinhood might proceed to see excessive transaction income. “Doge’s latest improve once more has correlated with elevated volumes and transaction revenues for Robinhood within the first quarter, however has led to declining buying and selling volumes and sure transaction income for Q2,” the weblog put up learn.
Featured picture from CoinMarketCap, chart from Tradingview.com