Trading platform Robinhood reports 75% surge in crypto trading
Trading platform Robinhood has reported a 75 percent surge in digital asset trading volume from October to November 2023, per a December 4 filing (Form 8-K) with the United States Securities and Exchange Commission (SEC).
However, this increased activity was not reflected in equity and options contract trading volumes, which remained largely stable compared to October.
It is a significant turnaround for Robinhood, which had reported a 55 percent drop in cryptocurrency notional volumes for the year in its Q3 results filing. This led to its Q3 revenue falling below analyst expectations for the quarter at $467 million. Transaction-based revenues decreased by 11 percent year-on-year to $185 million, mainly attributed to a dip in crypto volumes throughout 2022.
Robinhood expects to make more profit in the fourth quarter since the crypto market’s overall value has gone up by 40 percent, reaching $1.6 trillion in the last two months.
During a call about the company’s earnings in November, Robinhood co-founder and CEO Vlad Tenev told investors the platform might generate around “nine figures” in annual revenue. Tenev mentioned that retail investors were regaining interest in cryptocurrency.
“You’re starting to see retail investors wake up to certain segments of the rally, and in crypto activity, you’re seeing a groundswell,” said Tenev.
Robinhood’s shares have declined by one percent over the past year, in contrast to the S&P 500’s 14 percent gain. Meanwhile, competitors such as Charles Schwab (SCHW), integrating the TD Ameritrade acquisition, and Morgan Stanley, integrating the E-Trade acquisition, have experienced declines of 23 percent and 10 percent, respectively, during the same period.
Robinhood’s stock prices have risen by 18 percent since the start of 2023. However, the company’s stock has declined since mid-July, dropping from its 2023 peak of just over $13. Currently priced at $9.55 per share, Robinhood’s stock remains approximately 75 percent below its IPO price in 2021.
Robinhood plans to introduce futures trading in 2024 and bring equities to the UK markets, pending regulatory approval.
In August, Cointelegraph reported that Robinhood had acquired 118,000 BTC valued at around $3 billion.
Commission-free crypto trading app
Robinhood Markets Inc. is introducing commission-free cryptocurrency trading in the European Union following its recent launch of stock-broking services in the U.K. The newly launched app, available from Thursday, will allow European investors to trade over 25 cryptocurrencies, including Bitcoin, Ether, and Solana’s SOL.
Robinhood Crypto general manager Johann Kerbrat mentioned plans to introduce a loyalty program similar to cashback, where users can receive a percentage of their monthly trading volume as Bitcoin credits.
Robinhood, which initially introduced crypto trading in 2018, currently features around 15 tokens in its domestic market. Regulatory actions targeting this asset class led the app to remove certain coins, including SOL and Polygon’s MATIC, which were classified as unregistered securities by the SEC in June.
For now, European customers using Robinhood Crypto will not have the option to transfer their crypto holdings outside the app. According to Kerbrat, the company intends to include this feature next year and introduce additional tokens and staking services.
Since September, Robinhood has been registered as a virtual currency exchange operator in Lithuania. Kerbrat said the company is actively seeking approvals in more EU countries.
Once the new Markets in Crypto Assets (MiCA) regime takes effect in early 2025 within the EU, Robinhood will need to obtain full authorization as a crypto service provider in at least one EU member state.
