It's been an interesting time for Robinhood. If you missed it, Robinhood launched crypto trading in the EU. They have also added Solana and other tokens delisted in the U.S. This was one of one of the brokerage’s most significant blockchain moves of the past two years. Robinhood has been engaged with crypto over the past five years. During that period the firm’s fees from crypto trading range from just a few percentage points of net revenue to accounting for nearly half.
$BTC price has almost tripled since the beginning of the year, but it looks like Robinhood’s crypto revenue is the lowest it’s been in 3 years. in early 2018, the apps' bread-and-butter revenue source came from equities trading. Since then it's expanded to earning interest off of deposits and other assets. One of those assets is crypto. They were one of the first traditional financial services company in the U.S. to really embrace it and offer BTC $ETH. In 2019 they added $LTC $BCH $DOGE.
It was DOGE that became one of Robinhood’s most lucrative offerings. Amid the memestock fervor in the first half of 2021, DOGE boosted Robinhood’s revenue to all-time highs. Fees from trading the memecoin accounted for 32% of the company’s net revenue in the second quarter of 2021. However, since then crypto revenues have declined, dropping from a height of $233 million during the surge to just $23 million in the third quarter of 2023. Not only did revenue decline, Robinhood’s crypto business has also fallen under regulatory scrutiny which is inline with many other exchanges.
It's not all doom and gloom. If you zoom in Robinhood recently announced that its crypto trading volumes were up 75% in November. The expansion into the EU in December and BTC's price increase gives hope that we are on the verge of a bull market cycle which if history repeats itself will be very lucrative for Robinhood. Given their early commitment to the tech, it may be one of the best positioned to reap the rewards. Only time will tell and I know I'm excited to where we end up.
