Robinhood, a platform known for its crypto-friendly trading options, has experienced a significant 75% increase in its digital asset trading volume in November compared to the previous month.
According to a Form 8-K filed with the United States Securities and Exchange Commission (SEC) on December 4, Robinhood reported that its “November Crypto Notional Trading Volumes were roughly 75% higher than those of October 2023.” This surge in crypto trading activity contrasts with the platform’s equity and options contract trading volumes, which remained relatively unchanged from October.
This uptick marks a notable turnaround for Robinhood, especially after the company reported a 55% year-over-year decline in cryptocurrency notional volumes in its third-quarter results. Consequently, its Q3 revenue fell short of analysts’ expectations, totaling $467 million. The decline was primarily attributed to the decrease in crypto volumes throughout 2022, with transaction-based revenues dropping 11% year-on-year to $185 million.
Looking ahead, Robinhood may be poised for a more profitable fourth quarter, buoyed by the recent rally in the crypto market. This rally has seen the total market capitalization jump by 40% to $1.6 trillion over the past two months.
Vlad Tenev, Robinhood’s co-founder and CEO, expressed optimism in a November earnings call, suggesting that the platform could potentially generate “nine figures” in annual revenue. In a December 4 interview with Yahoo Finance, Tenev observed a renewed interest in crypto among retail investors. He noted that heightened media coverage and attention tend to increase as Bitcoin’s price nears its all-time highs, which he believes also plays a significant role in this renewed interest.
Despite these positive developments, Robinhood’s stock has experienced fluctuations. While the stock has risen 18% since the beginning of 2023, it has been on a downward trend since mid-July after peaking at just over $13 earlier in the year. At the time of the report, Robinhood’s stock was trading at $9.95 in after-hours trading, following a 2.5% increase on the day.
In addition to its existing offerings, Robinhood is expanding its services. The company plans to introduce equities in the United Kingdom markets and is aiming to launch futures trading in 2024, subject to regulatory approval.
Furthermore, a report from Cointelegraph in August highlighted that Robinhood had amassed approximately 118,000 BTC, valued at around $3 billion at that time.
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