Market Volatility Affects Robinhood Crypto Trading Revenue

Users have been more cautious about their investments this year due to a hard macro situation, according to Robinhood Markets Inc., which has weighed on its cryptocurrency-trading income.

Robinhood said in a statement on Thursday that first-quarter crypto income was down 39% from a year ago, to $54 million. Bloomberg questioned 11 analysts and found that the average forecast was $56.1 million. In comparison to a year ago, total net revenue was down 43%.

Chief Executive Officer Vlad Tenev said on an earnings call:

“With the uncertainty in the market, our customers became more cautious with their portfolios, trading less frequently and in smaller amounts across all asset classes, although crypto activity in particular came down pretty significantly,”

Robinhood has thrived in a context of low interest rates, low inflation, and growing markets over the majority of its lifetime. Customers are already beginning to notice the inverse trends, according to Tenev.

Still, cryptocurrency is one of Robinhood’s main areas of concentration. Crypto revenue accounted for 18% of overall net revenue, up from 13% in the previous quarter. Following client requests, it launched four new coins in April: Compound, Polygon, Solana, and Shiba Inu. The company stated that it plans to add more coins in the future.

Tenev added on the call that the crypto wallet, which was just handed out to all users, is a long-term driver of new clients to the crypto platform, but not a revenue driver.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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