Robinhood's Plunge Of 55% In Crypto Trading Revenue Is No Barrier To Launch Its EU Crypto Trading

Zinger Key Points
  • Robinhood’s Q3 marked a 55% Y/Y drop in its crypto trading revenue alongside a 9% increase in number of crypto assets held.
  • Despite the setback, the trading firm will soon launch its crypto trading services in EU and brokerage operations in U.K.

Robinhood’s HOOD third-quarter transaction-based revenues on cryptocurrencies indicated a significant plunge (55% year-over-year and 26% quarter-over-quarter) compared to the softer drop of 13% in transaction revenues for equities.

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What Happened? Popular for its role in the meme stock craze in early 2021, Robinhood’s declining trend in crypto trading revenue happened in the past two quarters.

The number of crypto assets held on behalf of customers narrowed by around 11% from the prior quarter. But, from the same period in the prior year, it saw a 9% increase.

CFO Jason Warnick believed with more crypto regulatory clarity, Robinhood would be able to innovate faster and improve its offering in the space.

In June 2023, Robinhood ceased support for Cardano ADA/USD, Polygon MATIC/USD and Solana SOL/USD amid regulatory challenges around the securities. Bitcoin BTC/USD, Ethereum ETH/USD, Dogecoin DOGE/USD and Shiba Inu SHIBA/USD are among the tokens traded on its platform.

Price Action: At the time of writing, Robinhood shares are trading 14% lower while the past six-month loss stands at 8%.

Peers such as Coinbase also saw a 12% fall in its total transaction revenue in the third quarter citing low volatility and the broader macro backdrop negatively impacting spot market trading volumes.

Also Read: 'Coinbase Is Focused In A Complicated Environment,' Will Benefit From Bitcoin ETF Approval: Analyst

Why Does It Matter? Despite the revenue slowdown, Robinhood looks to launch European Union crypto trading and U.K. brokerage operations in the upcoming weeks to expand its market share and higher international presence.

“Crypto benefits from a relatively clear regulatory framework in the EU and we’re excited to bring our capabilities across the pond to better serve that market," CEO Vlad Tenev said.Tenev cites that while the company looked to utilize the crypto market downturn as an opportunity to build capabilities for its platform, it was also looking for guidance from the U.S. government regarding crypto regulations.

Read Next: Robinhood CEO Vlad Tenev Is Optimistic About Bitcoin ETFs: 'People Are Interested In Ways To Diversify'

Benzinga’s Future Of Digital Assets Event in New York is scheduled on Nov.14. Attend and learn more about crypto trading revenues and how an ETF approval will boost trading volumes in the upcoming months. The gathering is seen as pivotal for the digital assets community. The event will spotlight the latest trends, innovations and challenges in the digital asset realm.

Photo: Shutterstock


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Posted In: CryptocurrencyNewsGlobalMarketscrypto trading revenueEUU.K.
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