Reversal of Fortunes
Crypto-friendly trading platform Robinhood has announced a significant surge in digital asset trading volume in November. According to an 8-K filing to the Securities and Exchange Commission, Robinhood reported a 75% month-on-month increase in November compared to October.
Flat Performance in Other Areas
While the crypto trading volume experienced a substantial boost, equity trading volumes and options contracts traded remained relatively flat during the same period compared to October.
Q3 Struggles
This increase in trading volume is a welcome reversal of fortunes for Robinhood, which had previously reported a 55% decrease in cryptocurrency notional volumes over the year in its Q3 results filing. As a result, its Q3 revenue fell below analyst estimates for the quarter.
Potential for a Profitable Q4
With the recent rally in the crypto market, which has seen total capitalization surge 40% to $1.6 trillion in the past two months, Robinhood is looking at the potential for a more profitable fourth quarter. Robinhood co-founder and CEO Vlad Tenev has expressed optimism, stating that the platform could eventually generate "nine figures" in annual revenue.
Renewed Interest in Crypto
According to Tenev, retail investors are once again showing interest in crypto. He noted that as the price of Bitcoin approaches all-time highs, media coverage and intensity increase, which in turn leads to increased interest from investors.
Stock Performance
Despite the positive news in the crypto trading volume, Robinhood's stock performance has been less impressive. The company's stock has been on a downward trend since mid-July, reaching a high of just over $13 in 2023. As of after-hours trading, the stock was priced at $9.95, representing a 2.5% daily gain.
Future Plans
In addition to its current offerings, Robinhood has plans to expand its services. The platform aims to launch equities in the U.K. markets and is also looking to introduce futures trading in 2024, pending regulatory approval.
Accumulation of Bitcoin
Earlier this year, Robinhood made headlines when it was reported that the platform had amassed 118,000 BTC, equivalent to around $3 billion at the time.
