With SEC fines and Congressional reprimands over meme stocks and gamified trading in its rearview mirror, Robinhood has emerged as the biggest traditional broker trading crypto, especially meme coins.By Javier Paz, Forbes Staff
The world’s 8th most valuable crypto, $39 billion (market cap) dogecoin has been on a tear. In the last 12 months the token, which represents nothing more than faith in the digital image of an adorable shiba inu dog, has gained 220%.
That’s wonderful news for Menlo Park, CA’s Robinhood, because recent SEC filings revealed that the crypto-friendly discount broker’s customers owned about 35 billion dogecoin tokens, about 24% of the memecoin’s entire circulating supply, worth about $8.8 billion today, but as much as $16.4 billion in December 2024.
Of course dogecoin is not the only crypto Robinhood’s millions of customers are fond of trading. The broker is now the leading traditional brokerage firm in digital assets and is beginning to challenge the market dominance of crypto exchange-purists like Coinbase. According to Robinhood’s fourth quarter results, released yesterday, cryptocurrencies were the firm’s number one revenue generator accounting for $358 million of its $1.01 billion in Q4 net revenues, or 35%. For the full year 2024, total revenues increased 58% to $2.95 billion, while net income was up 10-fold to $916 million.
Of the 20 or so cryptos the brokerage firm permits on its platform there are five other memecoins, BONK, Shiba Inu, Dogwifhat, Trump coin and Pepecoin, the cartoon frog sometimes associated with the alt-right. Bitcoin and Ethereum are also popular on Robinhood but so are seven zombie blockchains including Bitcoin Cash, Stellar, and Tezos. These billion dollar tokens trade actively but have almost no productive application other than to act as vehicles for speculation.
“In the Robinhood main app, we are going to keep adding [crypto assets] and continue to accelerate. In fact we have added seven new assets since the election,” said co-founder and CEO Vlad Tenev, during the company’s earnings call. “We have the engineering and infrastructure capabilities to add tokens remarkably quickly.”
It is no surprise that the billionaire founders of Robinhood, Tenev and Baiju Bhatt, who launched their upstart zero-commission brokerage in 2013 with the ostensibly noble mission to democratize investing, have again embraced a diet of junk food to nourish their crypto-hungry young traders. Robinhood has long courted rookie investors by gamifying its platform. Some 75% of its 25 million active accounts are held by Millennial and Gen Z investors. Like meme stocks, whose trading often defies traditional valuation metrics, meme coins go a step further–there are no real assets or fundamentals, period. How does one estimate the future earnings prospects of a picture of a dog with a knit cap on that has a market capitalization of $595 million?
In 2020, Robinhood’s trade-first, think-last appro