Robinhood’s Cryptocurrency Trading Sees October Surge

In October, the volume of digital asset trading on the cryptocurrency-friendly trading platform Robinhood increased by 75% month-over-month.

November Crypto Notional Trading Volumes were approximately 75% greater than October 2023 levels, according to a Form 8-K filing with the United States Securities and Exchange Commission (SEC) dated December 4.

Volumes of equity and options contract trading remained largely unchanged in comparison to October, despite the observed activity. A 55% decline in cryptocurrency notional volumes year-over-year was disclosed in Robinhood’s Q3 results filing, which represents a reversal from the company’s prosperous month.

The company’s revenue for the third quarter was $467 million, which was less than the analysts’ predicted $467 million. Primarily as a result of the decline in cryptocurrency volumes throughout 2022, transaction-based revenues decreased by 11% annually to $185 million.

Robinhood’s 8-K report showing preliminary operating data for November 2023. Source: SEC

In consideration of the recent surge in the cryptocurrency market capitalization to $1.6 trillion, up 40% in the last fortnight, Robinhood might be anticipating a more lucrative fourth quarter.

According to a November earnings call with investors, Vlad Tenev, co-founder and CEO of Robinhood, projected that the platform’s annual revenue could reach “nine figures” in the future. Retail investors are regaining interest in cryptocurrencies, Tenev told Yahoo Finance on December 4.

“Historically, there has been a correlation between the media attention and intensity surrounding Bitcoin price surges leading up to all-time highs,” he stated, adding, “I believe that also contributes.” Since the start of 2023, Robinhood stock prices have increased by 18%.

However, since mid-July 2023, when it peaked at just over $13, the company stock has been in a declining trend.

“You’re starting to see retail investors wake up to certain segments of the rally, and in crypto activity, you’re seeing a groundswell.”

Upon obtaining 2.5% per day as of the time of writing, Robinhood stock was valued at $9.95 in after-hours trading. Subsequent to regulatory approval, Robinhood intends to introduce futures trading in United Kingdom markets in 2024, in addition to equities.