Crypto fans were loading up on
announced trading availability on Monday morning. The token initially soared as much every bit thirty% on the news, and 12 hours later Shiba Inu was still trading a healthy 17% above where information technology was when the news broke.
It’south apparently dandy news for Shuba Inu to detect its style onto a new exchange. It also helps that Robinhood just had 7 digital currencies available earlier calculation four new denominations, including Shiba Inu, on Tuesday.
I’m still not convinced that the initial rally will stick. Let’s go over some of the reasons availability on Robinhood isn’t a game-changer for Shiba Inu fans.
1. Robinhood isn’t equally relevant every bit you might think
At that place’due south no denying that Robinhood Markets shook upwardly the brokerage industry a couple of years ago. Would most of the leading platforms be offering commission-complimentary trading otherwise? The problem now is that the platform has lost its grip on its young trading base of operations.
Robinhood lost traction as 2021 played out. In that location’due south no shortage of metrics that bear witness information technology.
- The number of monthly transacting users slipped from 21.iii meg in the second quarter to xviii.9 million in the 3rd quarter, and then 17.3 million in the fourth quarter.
- Boilerplate revenue per user has fallen in iii consecutive quarters. Robinhood has gone from generating $137 per user during the outset quarter to $64 in the 4th quarter.
- Assets under custody were lower by the stop of the yr than where they were at the midpoint of 2021.
The force per unit area points are everywhere. Fewer people are trading, and people are trading less. That’south a bad expect for a trading platform, and we haven’t even gotten to the most problematic metric.
Robinhood isn’t only about crypto. Information technology’due south also a hotbed for options and stock trading. Stock and options trading has held fairly steady through the final 3 quarters of 2021, just the same can’t be said for crypto. Robinhood reported transactions-based crypto revenue of $233 1000000 in the second quarter, followed by $51 million in the third and $48 1000000 in the quaternary quarter. Put some other way, Crypto transactions revenue went from 52% of Robinhood’s business in the second quarter to just 18% by the finish of the year.
two. Every fasten is different
If being added to Robinhood’s select number of crypto choices is so praiseworthy, shouldn’t all of the digital currencies added to Robinhood experience the same popular? In the same 12 hours of Shiba Inu’southward 17% ascent, two of the 3 other cryptocurrencies rose less than 4%. One has a higher market cap than Shiba Inu, and the other one is lower.
Is there any reason for Shiba Inu to be the one to surge higher? Is it only because Shiba Inu’due south a meme coin? There
a bullish case to exist made for Shiba Inu; I’thou just pointing out that Tuesday’s pop is more based on hype than on the sustainable merits accorded to a crypto that’due south been added to Robinhood. You might also want to check in on the uninspiring returns from some of the vii cryptocurrencies that take been trading on the platform for longer.
three. It’s too tardily for Robinhood to be taken seriously in crypto
Robinhood is trying to make up for the lost time it squandered. It’s finally rolling out a crypto wallet to brand its digital currencies easier to move abroad from the platform, merely as we’ve seen in contempo quarters, crypto traders take already cleared out.
Investors are smart plenty to see through the “free” crypto trading that Robinhood offers, and the folks sticking around the once trailblazing platform tend to be small players these days. Having Shiba Inu coin now bachelor is not detrimental to the crypto, merely it’s too not going to matter beyond Tuesday’southward initial buzz.
Rick Munarriz has no position in whatsoever of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.