By
Svetlana Soroka
April 26th, 2024
Despite some setbacks, Robinhood remains committed to the crypto space.
Investing app Robinhood saw its crypto trading revenue drop further in the third quarter of 2023. While the company’s net gains increased by 29% year-over-year to $467 million, its transaction-based income decreased.
According to the quarterly report, the crypto trading revenue plummeted by 55% to $23 million. The loss continues a downward trend for crypto-based transactions on the app. Recall that there was a loss of 1% in Q1 of 2023 and a further drop of 18% in Q2.
It wasn’t just the crypto trading yield that plummeted. While revenue from Options trading remained unchanged at $127 million, the yield from equities also reduced by 13% to $27 million.
What Caused the Drop in Crypto Trading Revenue?
The slowdown in crypto trading volume on Robinhood may be due to the company’s decision to delist tokens named as securities in the SEC lawsuits against Binance and Coinbase. Consequently, the platform now offers only fifteen cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Dogecoin (DOGE), and Avalanche (AVAX).
According to Chief Financial Officer Jason Warnick, more regulatory clarity around crypto would help Robinhood “to innovate even faster”.
Meanwhile, it isn’t only Robinhood that saw a drop in crypto trading gains. Coinbase also reported a loss in transaction revenue, citing low volatility and a broader “macro backdrop” as the cause. In its Q3 report, Coinbase registered a 12% decrease in transaction volume.
Robinhood Shares Future Growth Plans
Despite these setbacks, Robinhood Markets Inc (NASDAQ: HOOD) remains committed to the crypto space. The company announced plans to start EU crypto trading in the coming weeks.
“With an experienced team in place, we will soon launch brokerage operations in the UK. As another step in global expansion, we are also planning to launch crypto trading in the EU following our UK launch,” the company reported.
The announcement follows the withdrawal of some crypto firms from the UK market in a bid to comply with new rules introduced on October 8. These rules mandate crypto firms to provide clear risk labels and implement system changes.
Again, Robinhood is looking to introduce futures trading at some point. “We aim to bring the intuitive mobile experience that customers know from Robinhood to the industry,” it asserted.
CEO and Co-Founder of Robinhood Markets, Vlad Tenev, commented on the company’s commitment to providing industry-leading products. “We remain focused on providing industry-leading products that serve far more of customers’ financial needs, gaining market share, expanding internationally, and continuing to change the industry for the better,” said he.