Brokerage firm Robinhood announced its second-quarter earnings on Wednesday, revealing significant growth in cryptocurrency transaction revenues and trading volume. The company reported $81 million in crypto transaction-based revenues, a 161% rise compared to the same period last year.
The trading platform’s revenue from cryptocurrency transactions has now doubled what it earned from equity transactions in the same quarter. Despite this impressive growth, options trading remains Robinhood’s largest revenue generator, contributing $327 million to the company’s quarterly earnings.
Robinhood also saw a notable rise in its digital asset trading volume. The notional trading volume for digital assets surged to $21.5 billion, a 137% increase from 2023, driven by higher trading activity in top cryptocurrencies like Bitcoin and Ether.
However, this quarter’s trading volumes were down compared to the $36 billion recorded in the first quarter of this year.
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Robinhood Holds $20B in Crypto Assets
In terms of assets under custody, Robinhood reported holding $20.6 billion in crypto assets, marking a 57% year-on-year increase. Despite these gains, the company experienced a 27% reduction in total customer trades and an 18% decline in average notional trading volume per trader.
This drop was attributed to a decrease in crypto prices, which also led to a reduction in monthly active users over the quarter.
In June, Robinhood revealed it was looking to offer cryptocurrency futures in the US and Europe in the coming months. The announcement came after the exchange acquired Bitstamp, a global crypto exchange with over 50 active licenses and registrations.
Bitstamp serves customers across the EU, UK, US, and Asia, positioning Robinhood for further growth in the international market. However, the exact impact of this acquisition on Robinhood’s financials remains to be seen.
Robinhood’s number of monthly active users stood at 11.8 million by the end of June, reflecting a 9% increase compared to the same period last year.
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Robinhood Halts Overnight Trading
On Monday, Robinhood announced a temporary suspension of its overnight trading services. The suspension was due to issues with Blue Ocean ATS, the third-party firm responsible for handling Robinhood’s round-the-clock trading.
Robinhood 24 Hour Market's execution venue, Blue Ocean ATS (BOATs), has suspended overnight trading for tonight. 24 Hour Market orders that are open as of approx. 8 PM ET will be routed for execution starting at approx. 4 AM ET tomorrow. You may cancel your order at any time, and…
— Robinhood Help (@AskRobinhood) August 5, 2024
The announcement came amid a day of technical difficulties for several brokerage firms, including Charles Schwab, which experienced disruptions that temporarily prevented users from accessing their accounts.
Robinhood introduced its “24/5 trading” service in May 2023, allowing users to trade from Sunday evening through Friday evening.
Earlier this year, the company disclosed that it received a Wells Notice from the US Securities and Exchange Commission (SEC) regarding its crypto unit.
A Wells Notice indicates that the regulator has concluded an investigation and plans to file an enforcement action. The SEC has previously issued similar notices to other major industry players, including Uniswap and Consensys.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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