Reason Behind Tech Darlings Robinhood And Square Lack Of Concern About Cryptocurrency Profits
Robinhood, a leading stock trading app based in the US, whose valuation rose from $1.5 billion to $6 billion following its integration in cryptocurrency, noted that the firm does not rely on generating huge profits in the near future, and the firm is comfortable with it.
Vlad Tenev, the co-CEO of Robinhood stated that over 200,000 new clients registered to Robinhood Crypto on a daily basis after the launch of the company’s cryptocurrency trading platform. Following the integration of integration of crypto, Robinhood turned out to become the second most valuable fintech startup with over 4 million users, with all of them based in the US.
But, regardless of having more than million crypto users over the past few months, Tenev explained that the firm will basically process cryptocurrency trades for free, despite the fact that it will lose out on millions of dollars in profits.
“We don’t intend to make very much money on it at all for the foreseeable future. We intend to operate it as a breakeven business,” Tenev said on Fortune’s weekly fintech show.
With over a million user base, Robinhood Crypto could comfortably drive its platform to commercialize its cryptocurrency trading application and firmly increase its cryptocurrency business to increase profits.
During the first quarter of 2018, Binance CEO Changpeng Zhao noted that the Malta-based cryptocurrency exchange raised $200 million in profit, notably more than Deutsche Bank, the largest financial institution in Germany.
“Binance is the world’s largest cryptocurrency exchange. In the first 3 months from inception, profits amounted to $7,500,000 USD. In the 2nd quarter, profits amounted to $200,000,000 USD. The 3rd quarter is still in progress and is expected to have further growth. Any country that can attract Binance to open a branch in their location will receive a handsome tax income revenue,” Zhao said.
Behind Coinbase, Binance is the second biggest cryptocurrency exchange and it is the most widely used cryptocurrency-only trading platform. As a result, for the time being, it will not be easy for Robinhood to copy the profit margin of Binance. However, if the firm makes efforts and puts its focus on profits, it could be able to raise tens of millions of dollars in profit on a quarterly basis.
Yet, both Robinhood and $26 billion payments company Square managed by Twitter CEO Jack Dorsey hope to firmly increase their cryptocurrency business with decreased profits.