A top investment bank, JP Morgan, has given a warning about a potential bearish market move for dogecoin and Robinhood. Robinhood is a cryptocurrency exchange platform on which users can trade dogecoin pairs. Dogecoin trading
An analyst at JP Morgan, Kenneth Worthington, gave the warning during a short session to share investment notes. Worthington said that low retail interest in dogecoin will cause swelling pressure to build up, leading to a potentially huge volume of sell orders in December when Robinhood’s doge assets are unlocked. Robinhood’s stock currently trades at $35.59 and is predicted to stay the same ahead of an announcement next week.
Worthington fingered the low market volume of dogecoin on the exchange as the reason why Robinhood may experience bearish stock movements in the coming days. Robinhood had stated in its Q2 revenue report that the proceeds from dogecoin trading form about 62% of its revenue. It is therefore logical that low dogecoin market volume will mean lower revenue for the crypto exchange platform.
Barely 73 working hours to its Q3 revenue announcement, Robinhood has failed to see a spike in its dogecoin trading volume which has considerably reduced from the Q2 mark.
Dogecoin Price Movement
Dogecoin performed below Shina Inu this month with only a 15% price increase. Traders on Robinhood have created an online petition for Robinhood to list Shiba Inu so that they can trade it. Five days ago, the number of Shiba Inu holders leveled up with the number of dogecoin holders. It has prompted users on Robinhood to increase their calls for the exchange to list Shiba Inu quickly.
In fairness to dogecoin, the token has performed well since its rise into popularity in January. Dogecoin has reached a high price level that was previously unimagined. It has helped that celebrities like Elon Musk, movie giants AMC, and English club Watford have helped to promote dogecoin. Dogecoin has been called a bigger and better coin than ethereum and bitcoin by Elon Musk, who has high praises for its fast transactions and low fees.
Robinhood Locked Shares
Robinhood shares have been on a lockup that is set to expire on Dec. 1. The lockup followed Robinhood’s initial public offering in July was successful but there are now concerns that shareholders may be looking to sell their shares once they are unlocked in December. Worthington believes that the low trading volume of dogecoin might result in lower Robinhood share prices which will, in turn, make shareholders sell as many as half a million Robinhood shares in December. This might further plummet Robinhood’s price.
As with every instrument and asset, predictions may eventually not play out. In Robinhood’s case, the company and inventors will be hoping for more crypto-positive events to happen. Further adoption of dogecoin and an increase in its price may see the trading volume increase on exchanges including Robinhood. A potential good news in that regard comes from Benziga’s recent report that a third of American cryptocurrency owners own some dogecoins.