Robinhood, the commission-free brokerage firm, released its fourth-quarter earnings on Wednesday, revealing a significant rebound in cryptocurrency trading.
The company’s results showed a sharp increase in trading volume and revenue, fueled by Bitcoin’s price surge, institutional adoption, and speculation surrounding regulatory changes in the United States.
Robinhood Records a 400% Increase in Crypto Trading Volume
Crypto trading volume soared 400% year-over-year, reaching $70 billion. This marked a strong recovery after months of declining activity. In contrast, equity trading volume rose 154% to $423 billion.
The brokerage’s total transaction-based revenue surged 200% to $672 million, with crypto trading revenue leading the way. Crypto-related revenue skyrocketed 700% to $358 million, while equity trading revenue increased 144% to $61 million.
Market Momentum Drives Crypto Trading Spike
For most of 2024, Robinhood saw a steady drop in crypto trading activity. The company’s crypto volume declined from $36 billion in Q1 to just $14.4 billion in Q3. However, in Q4, activity rebounded sharply, coinciding with Bitcoin’s rapid appreciation and broader market optimism.
The price of Bitcoin neared the $100,000 mark, attracting both retail and institutional investors back into the market.
The resurgence was also driven by speculation about potential regulatory clarity in the U.S. Crypto investors closely watched developments surrounding clearer guidelines for digital assets. Institutional players increased their exposure to Bitcoin and other digital currencies, further strengthening the market.
Robinhood Expands Crypto Offerings
Beyond market momentum, Robinhood credited its product expansion for its strong Q4 performance. The company added seven new cryptocurrencies to its U.S. platform, increasing the variety of assets available to traders.
Furthermore, it made Ethereum staking available to European clients, enabling them to profit from their ETH investments.
The company also alluded to the potential expansion of derivatives trading in the future. Robinhood has declared ambitions to introduce futures trading for gold, oil, and Bitcoin in recent months.
This move aligns with its strategy to attract active traders and expand beyond traditional stock and options trading.
Also Read: Robinhood Enables SHIB Transfers For EU Users, Major EU Expansion Ahead?
Assets Under Custody and Regulatory Advocacy
Robinhood’s assets under custody (AUC) rose 88% year-over-year to $193 billion. Higher net deposits and the increasing valuations of stocks and cryptocurrencies fueled this growth.
CEO Vlad Tenev has been vocal about the need for regulatory reforms in the U.S. Last month, he wrote an op-ed for The Washington Post, urging the SEC to establish clearer rules for tokenizing equity.
He emphasized the need for democratizing private market investments, which are often accessible only to wealthy investors.
While Tenev has expressed interest in Bitcoin, he clarified in December that Robinhood does not plan to hold BTC in its reserves. However, the company remains committed to expanding its crypto offerings and advocating for policies that support digital asset adoption.
As Bitcoin approaches a major price milestone and regulatory discussions gain momentum, Robinhood’s role in the evolving financial landscape remains significant.