Robinhood (NASDAQ:HOOD) currently offers investors the ability to buy and sell seven different cryptocurrencies. Dogecoin (CCC:DOGE-USD) is one of them.
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Now, with the financial services platform looking to add a digital crypto wallet, investors are looking for their favorite coin to get in on the action. As a result, a petition has made the rounds asking Robinhood to list Shiba Inu (CCC:SHIB-USD). As I write this, it’s got more than 470,000 signatures out of a 500,000 goal.
As a result, Shiba Inu recently passed Dogecoin by market capitalization. Is this what the investment world has become? Shouldn’t cryptocurrencies get a bit more scrutiny than this?
In the meantime, I’m wondering what the next cryptocurrency will be to petition Robinhood for admission. But no matter what, Shiba Inu’s ascension in this way can impact Dogecoin’s performance on the platform, and this has implications for the latter’s future.
Dogecoin Is Less of an Influence
Robinhood reported its third-quarter results on Oct. 26. Through the first nine months of the year ended Sept. 30, the company’s transaction-based cryptocurrency revenues were $371.4 million, up from $14.8 million a year earlier.
Dogecoin remains a significant contributor to the investment platform’s transaction-based cryptocurrency revenue.
DOGE accounted for 40% of the $50.7 million in transaction-based cryptocurrency revenues in the third quarter. Overall, that’s $20.3 million out of $266.8 million in transaction-based revenue from crypto, options, equities, and other products.
So, in Q3 2021, Dogecoin accounted for 8% of transaction-based revenue, compared to 32% in Q2 2021 and 7% in Q1 2021.
The unpredictability of Dogecoin’s revenue generation on Robinhood is significant, so you can see why HOOD stock has struggled for most of its short life as a public company.
However, Dogecoin investors should also be concerned. If petitions such as Shiba Inu are successful, DOGE could very quickly go from the favorite dog on the block to an also-ran.
The Robinhood Waitlist Grows Larger
According to a recent Fortune article, the waitlist for the Robinhood crypto wallet has jumped past a million people. Speculation is that Robinhood will add more cryptocurrencies once the wallet is up and running.
The article elaborated on the company’s expectations:
“‘We feel very, very good about the coins that we’re currently listing on our platform,’ [CEO Vlad Tenev] said Tuesday on the company’s latest earnings conference call. ‘For any new coins that we add, we want to feel equally, if not more good.’”
Investors ought to be able to see where this is headed.
Robinhood wants to generate as much revenue as possible in a consistent manner. Unfortunately, adding more coins willy-nilly will only intensify the unpredictability of revenue from Dogecoin and others.
To smooth out lumps in this revenue, it would not be unreasonable for the company to ask for listing fees from the organizations behind these cryptocurrencies. The process could look very similar to the way Canadian grocers have charged suppliers for shelf space at their stores in the past.
Somebody’s got to pay. So why shouldn’t it be Dogecoin and the rest of the cryptocurrencies?
In a contrarian way, this actually might be good for Dogecoin. It could keep some of the DOGE wannabes out of the Robinhood dog pound, thus helping Dogecoin hold investors’ attention.
The Bottom Line on Dogecoin
The biggest problem Robinhood faces is that new crypto buyers might say, “If I can’t buy Shiba Inu here, I’ll go wherever I can to make my purchases.” Because of this, the rival token has another, indirect part to play in determining Dogecoin’s future.
The question becomes: What does Robinhood want to do with its cryptocurrency platform? Maybe it’s working toward a system where you invest a monthly sum, with the sum divided equally amongst all of the coins on its platform — not unlike an exchange traded fund (ETF).
If that’s the case, Dogecoin could become a part of a significant recurring revenue stream for Robinhood, which would also greatly benefit DOGE itself.
It will be interesting to see how a Shiba Inu listing on Robinhood affects Dogecoin’s price. It might just create more interest in the original meme coin, not less.
That’s a good thing.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
