In the second quarter of 2024, earnings from Robinhood’s crypto trading operations increased by 161% compared to the same period of the previous year.
The famous trading app earned 81 million dollars from April to June 2024 solely from its clients’ cryptocurrency operations, thanks to an increase in trading volume.
The increase in Robinhood’s earnings thanks to crypto trading
Recently, the company published its financial report for the second quarter of 2024.
The quarter ended with record revenues of 682 million dollars overall, up 40% compared to the same period in 2023.
Of these, almost 12% came from cryptocurrency exchange operations, whose increase, however, was greater compared to the overall average.
For example, the increase in revenue from stock trading turned out to be 60%, while that from criptovalute turned out to be 161%.
The trading volumes of crypto trading have increased by 137% compared to 2023, rising to 21.5 billion dollars in the quarter.
It should be noted, however, that compared to the first quarter of 2024, they have decreased by 40%.
The Assets Under Custody (AUC) have risen to nearly 140 billion dollars, thanks in particular to the continuous net deposits of cryptocurrencies. As of June 30, 2024, the value of the crypto held by the exchange was 20.6 billion dollars (+57% compared to 2023).
The future performance of Robinhood: will crypto trading support earnings?
The report recalls that in June Robinhood entered into an agreement to acquire Bitstamp, a well-known and historic crypto exchange with over 50 active licenses and registrations internationally in the EU, the United Kingdom, the USA, and Asia.
Furthermore, the company has also acquired Pluto Capital, a research platform on investments based on artificial intelligence (AI).
All this suggests that it has further growth potential, especially in the crypto field, given that all Bitstamp users will in fact become users of the company.
The decline
Despite this, while strong increases were recorded compared to the second quarter of last year, a sharp decline was recorded compared to the first quarter of the current year.
In particular, with regard to the crypto markets, Robinhood revealed that it has experienced a decline in monthly active users, due to the decline in cryptocurrency prices.
However, it is also a seasonal phenomenon, given that the quarters with the most interest and attention towards cryptocurrencies have historically been the first and the fourth, while the second and especially the third have often historically recorded declines.
Furthermore, the first quarter of 2024 was characterized by a true bullrun, which actually started in the fourth quarter of 2023, and therefore it is obvious that there was a lot of interest. The peak occurred in March, so starting from the first month of the second quarter (April) the interest inevitably waned a bit.
The performance in borsa
Robinhood is listed on the Nasdaq with the ticker HOOD.
The price of Robinhood shares started 2024 just below $13, and in the first quarter, it reached an annual bottom at just over $10 after mid-January.
Then, however, probably driven also by the bullrun of the financial markets, in February it started to grow, reaching a first annual high at the end of March above 20$.
After a brief and limited correction, it resumed its run in May, reaching over $24 shortly after mid-June.
After another brief and slight correction, in mid-July it touched 25$, only to crash below 14$ at the beginning of August. Now it is back above 17$.
The current price is significantly higher than at the beginning of the year, even though the $14 from a few days ago is only slightly higher than the initial $13. The fact is that a sort of mini speculative bubble inflated in the financial markets from January to June, and after the peaks in July, this mini-bubble burst.
This dynamic for now does not seem capable of reversing the medium/long-term trend, even though there are several analysts who believe that the situation might not improve.
In the specific case of Robinhood, the all-time highs on the stock exchange were recorded in 2021, in the midst of a speculative bubble, when the price of its shares soared to $85, only to then plummet below $7 the following year.