Robinhood Says Low Crypto Trading Activity Could Cause Revenue Decline in Q3 2021

In its amended initial public filing (IPO) prospectus with the U.S. Securities and Exchange Commission (SEC), Popular stock trading platform Robinhood revealed that it is expecting its revenue to drop in Q3 2021 as a result of the cool-off in the trading activity of the cryptocurrency market. 

Robinhood Expecting Drop in Revenue

With Robinhood planning to go public this July, the trading app revealed in a revised SEC filing that a decrease in retail trading activity could result in the company recording low revenue in Q3 2021 compared to revenue generated in the second quarter. 

According to Robinhood, the company experienced a surge in trading activity in January and February 2021, which later returned “to levels more in line with prior periods during the last few weeks of the quarter ended June 30, 2021, and remained at similar levels into the early part of the third quarter.”

Also, in Q1 2021, the filing notes that 17% of its transaction-based revenue came from crypto transactions. This was a leap from the 4% recorded in Q4 2020.

Furthermore, more than 9.5 million customers traded $88 billion worth of cryptocurrency on the Robinhood platform in Q1 2021. The company also held $12 billion in cryptocurrency assets under custody as of March 2021. 


The crypto market enjoyed a sustained parabolic advance from late 2020 up until May 2021, with the token prices declining by more than 50% since then.

An excerpt from the amended filing detailing the company’s expectations of a revenue drop reads:

“We expect our revenue for the three months ending September 30, 2021 to be lower, as compared to the three months ended June 30, 2021, as a result of decreased levels of trading activity relative to the record highs in trading activity, particularly in cryptocurrencies, during the three months ended June 30, 2021, and expected seasonality.”

IPO to be Valued at $35 Billion

Meanwhile, Robinhood is targeting a market valuation of $35 billion for its upcoming IPO. The stock trading platform is looking to sell 55 million shares of its Class A common stock at a price range of $38 – $42 per share, with the aim of raising $2.3 billion. 

Robinhood has come under severe regulatory scrutiny, particularly after the GameStop saga. In June, the U.S. Securities and Exchange Commission (SEC) questioned the company about its cryptocurrency activities, causing a delay in Robinhood’s IPO plans.

Also, in June, the Financial Industry Regulatory Authority (FINRA) fined Robinhood approximately $70 million. According to the regulator, the trading platform caused harm to millions of its customers. 


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U.S. Government Puts Up $10 Million Bounty In Crypto

The U.S. Department of State has put out an offer for a bounty in crypto up to the tune of $10 million in exchange for actionable information on cyberattacks that are carried out by foreign governments. This will be the first time that the U.S. government has embraced the use of cryptocurrencies to pay for services rendered.

The offer was made through the U.S. Department of State’s Rewards for Justice program, administered by the Diplomatic Security Service. Since certain cyber operations targeting United States critical infrastructure might violate the Computer Fraud and Abuse Act (FCAA), the Department of State is trying to get in front of the attacks before they occur.

Related Reading | Make It Rain Satoshis: Las Vegas Strip Club Starts Accepting Bitcoin Payments

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These attacks include and are not limited to transmitting extortion threats as part of ransomware attacks, intentional unauthorized access to a computer, or exceeding authorized access. In which case, the attacker would obtain information from a protected computer, which they can use to transmit a program, information, code, or command. And thus, use that access to cause damage to a protected computer.

How Will The Ransom Be Paid

The U.S. Department of State explained that they had set up a tips-reporting channel using the Dark Web (Tor-based) in order to ensure the safety and security of sources and make sure they are protected.

The U.S. Department of State’s Rewards for Justice program is also working with other agency partners in order to ensure the privacy of the information and make sure the information coming in is processed in a timely manner.

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Crypto total market cap chart on

Crypto total market cap chart on

Total crypto market cap trails $1.24T | Source: Crypto Total Market Cap on

To ensure this, the U.S. Department of State has also stated that the reward payments may also include payments in cryptocurrency. This is not a stretch as a good way to ensure the privacy of the reporters would be to pay in digital assets, as this will ensure that the attackers cannot track who the payments were made to.

A report from CoinDesk writes that a State Department spokesperson had confirmed that this would be the first time that the program would offer payment in crypto.

This marks the first time since its establishment in 1984 that the Rewards for Justice program has offered a reward payment in cryptocurrency.

The U.S. Government And Crypto Going Forward

The offer of possible payment in digital assets by the Rewards for Justice program shows that crypto adoption is headed in the right direction in the industry.

One problem that has been in the crypto space is the fact that governments have been so strongly against digital currencies. Crypto trading is banned in a lot of countries.

Recently, China carried out a massive crackdown on mining in the country, which happens to be the mining capital of the world, with over 70% of mining done in the country. And in the same streak, the government had ordered banks and financial institutions to stop enabling trading of crypto in the country.

Related Reading | Bitcoin Might Already Be In A Bear Market, Investors Just Don’t Know It Yet

But news of El Salvador making bitcoin a legal tender and other countries showing interest in doing the same has shown that crypto adoption is becoming more and more a reality.

Politicians in the U.S. government have also started showing support for the coin. U.S. Mayor Scott Conger posted on his Twitter account that he believed that bitcoin would help to fix inflation.

And with the U.S. Department of State’s Rewards for Justice program offering payment for services in crypto, there is no doubt that the general attitude towards crypto in the government is slowly but surely changing.

Featured image from International Banker, chart from


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Bitcoin Senator: Ban US Athletes From Using China’s Digital Yuan at Beijing Winter Olympics

In brief

  • The Beijing Winter Olympics are in February 2022.
  • The digital yuan is being piloted right now.
  • Three senators think using the yuan further enables Chinese state surveillance.

With this month’s Tokyo Summer Olympics clouded in uncertainty due to COVID, prominent U.S. lawmakers are already looking ahead to the next games, the 2022 Winter Olympics in Beijing.

And they’re worried not about the spread of a virus, but about the spread of money.

Bitcoin proponent and freshman U.S. Senator Cynthia Lummis (R-WY), along with Senators Marsha Blackburn (R-TN) and Roger Wicker (R-MS) today sent an open letter to the chair of the U.S. Olympic and Paralympic Committee requesting that it “forbid American athletes from receiving or using digital yuan during the Beijing Olympics” scheduled for February 2022.

According to the trio, “the digital yuan may be used to surveil Chinese citizens and those visiting China on an unprecedented scale.”

The digital yuan is China’s central bank digital currency—a computerized form of its national currency, the yuan. Currently being trialled by nearly 21 million people and 3.5 million businesses, according to the People’s Bank of China (PBoC), the digital currency project is the largest of its kind in the world. 

Central bank digital currencies are akin to stablecoins, a type of digital currency designed to hold its value relative to another asset, but they are not the same.

Federal Reserve Chair Jerome Powell testified before Congress that central bank digital currencies would obviate the need for stablecoins, which he sees as risky. Leading stablecoin Tether, for instance, is mostly backed by debts rather than dollars in a vault. That leaves it vulnerable to illiquidity during severe financial crises, said Powell. 

Fan Yifei, a PBoC deputy governor, earlier this month said his bank is concerned about the speed at which stablecoins are expanding. By issuing its own digital currency, China and its 1.4 billion people can dwarf the reach of commercial stablecoins.

While China’s central bank sees global stablecoins bringing “risks and challenges to the international monetary system,” Lummis et al see China’s state-sponsored digital currency as the real risk, as it’s controlled by the PBoC and not decentralized.

They point to “the Chinese Communist Party’s use of new and emerging technologies to suppress the Uyghur minority, the people of Hong Kong, and those across China who strive for freedom of expression.”

The senators have requested a briefing on the matter before the Senate Committee on Commerce, Science, and Transportation within the next month.


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Here’s how altcoin futures volumes and the USD lending rate signal market crashes

Every once in a while, a new indicator pops out that can be used to detect price tops and bottoms in the market. This assertion is even more evident in cryptocurrencies because the data comes from exchanges and on-chain data extracted from the blockchain.

These indicators are constantly monitored and commented on by analysts and traders. Some of the lesser-known metrics use data from altcoin derivatives volumes and the Bitfinex U.S. dollar lending rate.

Altcoin volumes in futures markets indicate overheat

The futures contract volume is usually triple that of, or even five times higher than, regular spot markets. This phenomenon is not exclusive to cryptocurrency markets, as these contracts allow leverage trading, but the comparison isn’t exactly fair because the contracts are synthetic products, while Bitcoin (BTC) is digitally scarce.

By measuring the market share of Bitcoin, Ether (ETH) and the remaining altcoins, it is possible to analyze exactly what traders are focusing on.

Bitcoin, Ether and altcoins futures volume. Source: Coinalyze

The chart above shows that Bitcoin and Ether represented 65% to 85% of the aggregate volume in March. Still, as altcoins gained relevance, this figure dropped to 45% for the first time ever on April 6. 11 days later (April 17), the total cryptocurrency market capitalization tanked 20%.

This phenomenon repeated itself on May 6 as the Bitcoin and Ether market share in derivatives volumes reached a historical low at 39%. On May 10, the total market capitalization dropped 12%. It seems like too much of a coincidence, and it makes sense to consider whether the market overheats whenever the market share held by altcoin derivatives spikes.

There are multiple reasons to relate a sharp increase in altcoin volume to excessive optimism. For example, changing focus from Bitcoin and Ether indicates that investors no longer see much upside and are seeking options elsewhere.

The Bitfinex U.S. dollar lending rate usually spikes ahead of crashes

Margin trading allows an investor to leverage their trading position by borrowing money. For example, borrowing dolla will allow one to buy Bitcoin, thus increasing their exposure. Although there’s an interest rate involved with borrowing, the trader expects BTC’s price appreciation to compensate for it.

Whenever there’s excessive demand for the dollar lending rate, it is usually an indicator that the market is becoming reckless.

Daily U.S. dollar lending rate (above) and Bitcoin price in USD (below). Source: Bitfinex

The above data shows that such an event happened four times in 2021, and the last one occurred on April 13, one day before the $65,800 all-time high for Bitcoin. For example, reaching a 0.16% daily rate is equivalent to a 5% monthly fee, which is costly even for the most optimistic investors.

Traders should keep in mind that markets can remain irrational longer than any investor can remain solvent. This means that irrationality can prevail for long periods, including altcoin euphoria and the excessive use of leverage by buyers.

Whenever multiple indicators point to an overheating market, traders should always consider reducing their positions. Going forward, the altcoin futures market share and the Bitfinex dollar lending rate should be carefully monitored when searching for market tops.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.