Robinhood teams up with Burger King to Drive Cryptocurrency Adoption with Fast Food

In an unprecedented push towards cryptocurrency adoption, Robinhood has announced a partnership with restaurant Burger King to introduce the fast-food chain’s new offer; ‘Burger King with a side of crypto’. The move will see 20 bitcoin, 200 Ethereum and two-million become available to win for customers, as Robinhood seeks to accelerate cryptocurrency adoption amidst its stocks’ testing start to life on Wall Street.

The offer will be available for Burger King’s Royal Perks members, and to be eligible for participation, customers are required to “make a minimum $5 pre-tax Burger King food and/or beverage purchase.”

(Image: Bitcoin.com)

The offer, which requires users to register for Burger King’s Royal Perks scheme and download the Robinhood app, appears to have been devised in a bid to help both companies to recover from a disappointing Q3 of 2021 and to win more customers.

“Whether it’s offering bitcoin or having celebrities push meals, the goal is to get customers to turn left into a Burger King versus right somewhere else,” explained Robert Passikoff, president of Brand Keys, a brand consultancy firm. “The center of the whole thing is advertising isn’t driving people to the restaurants. So, they’ve had to turn to promotions, which exist in its entirety to drive behavior. Promotions work.”

According to reports from The Drum, a recent Burger King earnings call saw chief executive Jose Cil claim that marketing efforts have delivered disappointing returns, which has meant that the chain will be placing greater emphasis on its Royal Perks program.

Likewise, Robinhood’s stock has been dwindling amidst a dip in user activity. But could the company’s high-profile campaign alongside Burger King pay dividends for the embattled company? Let’s take a deeper look at the complexity of Robinhood’s bid to build on the growth it saw in 2020 and early 2021:

Robinhood’s Battle to Become the King of Crypto

Online investment platform Robinhood enjoyed an exceptional start to 2021. As a cryptocurrency bull market was taking hold, users flocked to the app to invest in assets like bitcoin, Ethereum, and, significantly, the meme token Dogecoin.

(Image: Robinhood)

As Robinhood’s own data shows, new cryptocurrency traders arriving at the platform grew to an average of 3 million per month for January and February 2021.

This heavy growth in user interest emboldened Robinhood to go public in July 2021. However, the company encountered plenty of difficult challenges in the months that followed its high-profile Nasdaq listing.

Today, Robinhood’s stock has shed much of the value it accumulated in the weeks following its debut, and the company’s Q3 results show a significant decline in active users.

Robinhood’s Q3 results showed that the total number of funded accounts had fallen to 22.4 million, down from 22.5 in Q2. After a record-breaking first half of the year where the app had added 10 million accounts, analysts had expected growth to continue above 24 million.

Monthly active users also dropped to 18.9 million from 21.3 million in the second quarter. Further to this, the company’s revenue fell to $365 million from $565 million in the second quarter. Astonishingly, cryptocurrency trading within the app, which had accounted for $233 million in revenue in Q2, delivered just $51 million in Q3.

With analysts anticipating quarterly revenues of up to $497 million, Q3 brought in “no greater than $325 million,” underlining a quarter that comprehensively failed to live up to expectations.

Here, it’s important to note that Robinhood’s decision to go public coincided with harsh corrections that rocked the world of cryptocurrency - sending popular assets like bitcoin tumbling to less than 50% of their value in a matter of weeks.

Significantly, although heavy levels of volatility are typical within the crypto landscape, the corrections likely scared investors away from the industry in the short term - contributing to Robinhood’s revenue downturn.

Most importantly, however, was that the cryptocurrency market crash stopped meme investing in its tracks moving into Q3 of 2021. This meant that assets like dogecoin and shiba inu, tokens that offer little in the way of fundamentals but are still largely popular because of their influential backers and the jokes that they reference, fell dramatically.

Robinhood’s Q3 results showed that 40% of the app’s cryptocurrency trading revenue came from dogecoin - a massive share of the platform’s volume. In Q2 this figure was even higher at 62% of the company’s crypto transaction-based revenue.

Such a hefty reliance on a meme-based asset should’ve rung alarm bells internally at Robinhood. But it’s no surprise that the company has made two million dogecoin available to win as part of its partnership with Burger King.

By promoting its most popular asset to a mainstream audience, Robinhood undoubtedly intends to drum up a new and active user base to see out a strong end to 2021 in a year that started with much promise.

Securing Growth by Going Mainstream

Although Robinhood’s Q3 results are alarming, Maxim Manturov, head of investment research at Freedom Finance Europe, believes that the future remains bright for the popular investing app.

“Robinhood's long-term prospects remain positive. Even with these short-term concerns, Robinhood is well placed to create long-term value. It is important to note that real interest rates in the US have been negative for an extended period. Real interest rates will likely remain negative even after the (likely) Fed rate hike in 2022. This is important because negative real rates contribute to higher trading and speculative activity in asset markets,” Manturov explained.

“To maintain their purchasing power despite the negative rates, the Americans will be looking to generate income from stocks, cryptocurrencies, precious metals and other investments, and trading instruments. This is good news for Robinhood, which has positioned itself as the preferred trading platform for young investors.”

Although fast food and cryptocurrency don’t seem like a natural fit, it represents a perfect partnership for Robinhood to continue to appeal to younger investors while showcasing its wares. Burger King is a major restaurant chain and a great launchpad for bringing mainstream appeal to crypto.

As the wider cryptocurrency market becomes more bullish moving into Q4 2021 after a disappointing summer, we’re likely to see far more instances of crypto finding more mainstream audiences. With this in mind, it’s likely that Robinhood will be well-positioned to put a difficult Q3 behind itself whilst looking to a brighter start to 2022.

Author bio

Dmytro is a tech and finance writer based in London. Founder of Solvid and Pridicto. His work has been published in Nasdaq, Kiplinger, Financial Express, and The Diplomat.