Robinhood’s Higher Crypto Revenue Could be Positive for Coinbase Earnings

Robinhood
(HOOD),
the
popular
trading
platform,
said
in
a
statement
that
its

crypto
revenue
rose
10%
versus
a
year
earlier
in
the
fourth
quarter,
reaching
$43
million,
as
more
users
traded
crypto.
This
could
bode
well
for
crypto
trading
platform
peer
Coinbase
(COIN),
where
trading
volume
is
one
of
the
key
contributors
of
revenue.

The
company
said
in
a

presentation
that
the
notional
volume
of
the
crypto
trading
it
handled
was
up
89%
compared
to
the
previous
quarter
due
to
more
customers
placing
a
higher
volumes
of
trades.

The
higher
volume
isn’t
a
surprise
as
prices
in
the
digital
asset
market
surged
on
optimism
that
spot
bitcoin
exchange-traded
funds
(ETFs)
would
get
approved
in
the
U.S.
(That
did
come
to
pass
in
January.)

Robinhood
said
that
its
transaction-based
revenues
for
the
quarter
were
up
8%
from
the
previous
year,
mainly
driven
by
crypto
trading.
Coinbase
is
reporting
its
earnings
on
Thursday
and
may
see
similar
results
for
its
trading
volume
–
all
else
being
equal.
COIN
shares
were
up
slightly
in
the

post-market
trading
on
Tuesday.

Robinhood
also
expects
to
win
more
crypto
trading
market
share
this
year
and
expand
internationally.
Most
recently,
it

started
letting
European
Union
customers
trade
crypto
on
its
platform.

“2023
was
a
strong
year
as
our
product
velocity
continued
to
accelerate,
our
trading
market
share
increased,
and
we
started
to
expand
globally,”
Vlad
Tenev,
CEO
and
co-founder
of
Robinhood,
said
in
a
statement.
“And
we’re
off
to
an
even
better
start
in
2024,
as
we’ve
already
brought
in
more
Funded
Customers
and
Net
Deposits
through
the
first
half
of
Q1
than
we
did
in
all
of
Q4
2023,”
he
added.

The
trading
platform
also
said
that
its
overall
fourth-quarter
revenue
was
$471
million,
beating
the
average
analyst
estimate
of
$454.7
million,
according
to
FactSet
data.
Meanwhile,
earnings
per
share
was
$0.03,
beating
the
estimate
for
a
$0.01
loss
per
share.

The
company’s
shares
rose
about
15%
on
Tuesday
after
the
results
were
released.
For
the
year,
the
stock
has
fallen
nearly
7%
versus
the
S&P
500’s
4.4%
advance.