Robinhood reports a 112% jump in crypto trading volume, but there’s a catch

Robinhood has reported a 112% year-over-year increase in cryptocurrency trading volume, reaching $14.4 billion in the third quarter of 2024.

However, this increase comes amid a decline in trading activity compared to the start of the year, with volumes peaking at $36 billion in the first quarter and falling to 21,500 million dollars in the second quarter.

The results did not meet analysts’ expectations

Despite this slowdown in momentum in 2024, the trading platform saw growth in its transaction-based revenue. The report indicates that revenue increased 72% over the previous year to $319 million. Of this, cryptocurrency trading accounted for $61 million, representing a 165% increase compared to last year. However, this figure was lower than the $81 million generated in the previous quarter.

Overall, the company reported net income of $150 million and total revenue of $637 million for the third quarter. However, these results have not reached the expectations of analysts.

Reported earnings per share (EPS) of $0.17 missed the Zacks Consensus Estimate of $0.18, while total revenue was 3.6% below $661.2 million of expected dollars.

Other parts of Robinhood’s business also performed well. Options trading revenue increased to $202 million, up 63% from the same period last year, and equity trading was $37 million, reflecting a 37% increase.

The company also disclosed an increase in its assets under custody (AUC). The metric grew 76% year-over-year to $152.2 billion, driven by net user deposits and rising stock and cryptocurrency valuations.

Robinhood executives discuss third quarter results

Robinhood CEO and co-founder Vlad Tenev expressed his pride in the results, saying they were a testament to how well the company’s “product engine” works.

He also highlighted recent initiatives such as the launch of Robinhood Legend, a new desktop platform and the upcoming introduction of index options, futures and a realized profit and loss tool.

CFO Jason Warnick noted the overall strength of the quarter, pointing to 36% year-over-year revenue growth that contributed heavily to the bottom line.

Since launching its cryptocurrency unit in February 2018, Robinhood has expanded its offering through various partnerships and initiatives.

Initially starting with Bitcoin and Ethereum trading, the stock brokerage firm has expanded its offerings to include Litecoin, Uniswap, Avalanche, Chainlink and other tokens.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!