Robinhood is handing out dogecoin in Burger King sweepstakes Hoping to lure back retail investors
Last week, Robinhood’s third-quarter earnings missed Wall Street projections by more than 10%, prompting the company’s stock price (HOOD) to plummet. With bitcoin trading down 78 percent in the last three months, the company wants to get additional investors to utilize its platform, particularly for cryptocurrency trading.
Now, it’s partnering with fast-food behemoth Burger King, which is owned by Restaurant Brands International, to distribute free dogecoin (DOGE-USD) as well as BTC and ETH through sweepstakes (QSR).
“Crypto is entertaining. It’s also a highly technical piece. “We’re continually emphasizing ways to make it more accessible, to break down that emotional barrier for consumers getting involved in the market,” Christine Brown, Robinhood Crypto COO, told Yahoo Finance.
The wager on whether a Burger King Whopper can help new traders on the fence about crypto may not seem like the most obvious representation of Robinhood’s objective to “democratize finance.” The contest, like dogecoin itself, Brown believes, might make crypto less daunting.
“It’s a lovely objective, but their business strategy is absolutely at odds with it,” Chris Schwarz, an associate professor of finance at the University of California, Irvine’s Paul Merage School of Business, said. According to his research, Robinhood’s business model has relied on bringing a continuous supply of first-time traders into the markets over the last year.
Furthermore, Schwarz recently co-authored a study for the Journal of Finance in which he discovered that the way information is shown in the Robinhood app influences user purchasing, causing new investors to herd into assets as their values rise. It may eventually result in a loss of money.
“That’s an unsustainable business model because you either need the same group of individuals who believe it’ll work one of these times, or you need fresh, new people to come in and play the game,” Schwarz told Yahoo Finance. “And there are probably only so many people who are willing to do it.”
Robinhood is giving Burger King’s most loyal customers the chance to win free cryptocurrency until November 21. After completing a $5 or more Burger King purchase, guests who sign up for the restaurant’s BK Royal Perks loyalty program have the chance to win doge, ethereum, or bitcoin.
The contest is significantly skewed in favor of giving away free dogecoin while prizes last, with odds of 1:1. The chances of actually winning ether or bitcoin are much lower, with odds of 1 in 10,000 and 1 in 100,000, respectively.
Apart from the fact that it is worth less than $1, this majority of dogecoin sweepstakes contributes to the earnings that Robinhood has already made from the asset’s listing.
According to data from Apptobia and Yahoo, the price of Dogecoin has prompted more downloads of Robinhood’s mobile app over the last year. Customers selling dogecoin accounted for 62 percent of Robinhood’s crypto revenue in Q2 2021, but the business reported a dramatic dip in crypto trading in the third quarter. Downloads of the platforms’ applications Meanwhile, many Robinhood users have switched to the new dog meme-themed shiba inu coin (SHIB-USD) and are asking that the firm make it available for trading. There has been a lot of demand for the company to include a new dog-themed cryptocurrency. Over the last week, the dogecoin derivative has increased 82 percent in value, exceeding dogecoin, with Robinhood capturing none of the excitement.