Online trading platform for traditional as well as crypto assets namely Robinhood is facing a huge crisis as the value of shares of the platform is rapidly going down and has declined to an alarming level of 70%. The company got to see huge revenue collection from its crypto trading, particularly Dogecoin, yet it is still struggling to eliminate the reduction in the share value.
Currently, the share value of Robinhood has declined to an alarming level of 70%.
Earlier in the month of August, Robinhood was lucky enough to see an all-time high (ATH) value against the price of its shares. The reason for achieving August ATH was because of revenues collected for the initial two quarters of 2021 from crypto trading. More than 60% of the revenues collected during this time were from Dogecoin trading only. During that period, crypto trading revenues were approximately US$ 233 Million. In respect of the revenues for the first two quarters, Dogecoin trading gains made up 41% of the revenues so collected.
It wasn’t long ago when Robinhood’s per-share value was US$ 70.39. However, there was a crypto market crash that happened in August and continued till the end of October 2021. During this period, the overall crypto economy lost more than 50% of its market capitalization. Similarly, the value of Bitcoin went down as low as 50% i.e. reduced from US$ 60,000 to US$ 30,000. The impact of the crypto market crash was also visible on the crypto trade volume of Robinhood. It was noted by Robinhood that from the end of August till the end of October, crypto trade volume shrank to almost 20%.
One of the best trading crypto vehicles on the platform of Robinhood was Dogecoin. However, the Dogecoin trading was also severely affected and went low as 30%. All of these aspects then brought the value of Robinhood’s shares at a price of US$ 38 per share.
As regards the revenue generation for Robinhood in the third quarter, the results were almost the same. Simultaneously, with the shrinkage of crypto trading by 79%, the trading company collected only 19% of the total revenue.
Chris MacDonald of TipRanks is one of the great admirers of Robinhood. MacDonald commented that a 70% decline in share value is dangerous for the company. Evidently, Robinhood must make good use of crypto trading for altering the figures into favorable ones.
Robinhood was established purely as an online financial service provider for ordinary people. It leveraged traditional trading opportunities to its members at zero rates while memberships were free. It soon launched crypto trading as well and is currently one of the top online trading companies for traditional and crypto-assets trading. Robinhood is now hoping that the crypto economy is again boosting and so is its crypto trading and crypto revenues. It believes that the 4th quarter will bring about the change it needed in the share value.