Robinhood Announces Surging 112% Increase in Cryptocurrency Trading Volume with a Caveat

Cryptocurrency trading volumes on Robinhood soared by 112% year-over-year, hitting $14.4 billion in Q3 of 2024.

Even with this impressive growth, there’s been a notable dip from the heights of earlier in the year. The first quarter metrics showed a peak of $36 billion, which then declined to $21.5 billion in Q2.

Expectations vs. Reality: A Comparative Look

Despite a reduction in pace in 2024, Robinhood’s transaction-related revenue demonstrated an upward trend. According to the released report, revenue saw a 72% increase year-over-year, totaling $319 million. Crypto trades specifically contributed $61 million to this figure, a staggering 165% rise from the previous year. This, however, was a decrease from the $81 million earned in Q2.

The collected revenue was $637 million with a net income of $150 million for Q3. Nevertheless, these figures didn’t meet the financial analysts’ projections.

The actual earnings per share (EPS) of $0.17 did not reach the consensus estimate of $0.18 by Zacks, with the revenue also falling short by 3.6% from the expected $661.2 million.

Diversification has paid off for Robinhood, as other company segments also reported robust growth. Options trading revenue climbed to $202 million, a 63% increase from last year, and equities trading earned $37 million, up 37%.

Assets Under Custody (AUC) also experienced a significant upturn, with a 76% year-over-year growth to $152.2 billion, driven by user net deposits and the appreciated value of stocks and crypto holdings.

Insights from Robinhood’s Leadership on the Third-Quarter Performances

Vlad Tenev, the firm’s CEO and co-founder, took pride in the accomplishments, indicating a smooth operation of Robinhood’s product offerings.

He underscored recent developments including the roll-out of Robinhood Legend, a fresh desktop platform, and the anticipated launch of index options, futures, plus a tool to track realized gains and losses.

Jason Warnick, the Chief Financial Officer, celebrated the quarter’s robust performance with a year-over-year revenue escalation of 36%, significantly benefiting the company’s profitability.

Robinhood has been diversifying since the inception of its crypto segment in February 2018, expanding its offerings through multiple partnerships and initiatives.

Originally offering only Bitcoin and Ethereum, the brokerage has now expanded to include Litecoin, Uniswap, Avalanche, Chainlink, among other tokens.