![]() ![]() ![]() Funded accounts increased to 22.5 million while monthly active users increased 109%. As mentioned, cryptocurrency transaction related revenues increased over 40 times. Total net revenues for the quarter increased 131% and transaction based revenues increased 141%. Continued acceleration from that category may be harder to come by the law of large numbers and intense competition comes to the forefront. HOOD can always bet the farm that another crazy, excessive meme stock will rise to the forefront over and over - but those days will end as well at some point.Ĭrypto transaction-based revenues rose to $233 million in Q2, more than 40 times the $5.3 million generated in the year-ago quarter. ![]() Robinhood may make money on the way down, but eventually after all those losses, traders will lose interest. I believe this to be a giant red flag as well because I firmly believe Dogecoin will eventually be completely worthless. However, Dogecoin (CCC: DOGE-USD) represented 62% of all crypto trading on the platform as interest in the bizarre cryptocurrency soared in the quarter. In its Q2 earnings report, Robinhood reveals that crypto trading now accounts for 51% of all transaction based revenues with option trading being the next largest category at 37%. This could become a major competitive disadvantage if this regulatory move becomes a reality. However in its S-1 filing (IPO prospectus), the company warned that certain competitors don’t engage in PFOF, or have a much lower percent of their business tied to PFOF. HOOD stock has been in a relatively tight trading range from the low $40s to high $40s throughout much of August and September. Investors aren’t buying into the likelihood of 79% of HOOD’s revenue being greatly reduced or eliminated. PFOF has become a major revenue source for most brokerage firms as the advent of commission free trading took hold. This is based on their opinion that these transactions represent “an inherent conflict of interest”. However the Securities and Exchange Commission said in August that a full scale ban on PFOF is on the table. This was up from 77% in the year prior quarter. These rebates across equities, options and cryptocurrencies represent 79% of Robinhood’s total revenues for Q2 2021. Payment for order flow (PFOF) is the common practice where brokerage firms forward customer orders to high-frequency trading firms in exchange for “transaction rebates”. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |