Robin HoodThe popular online stockbroker perhaps best known for its role in the memestock craze of early 2021, announced Tuesday in its third-quarter earnings report that it plans to launch cryptocurrency trading in the European Union "in the coming weeks".
"Looking ahead, we remain focused on delivering industry-leading products that address many more customers' financial needs, gaining market share, expanding internationally and continuing to change the industry for the better," said Vlad Tenev, CEO and co-founder, in a statement.
However, the brokerage app's planned expansion of cryptocurrency trading, currently only available in the US, to Europe, accompanied a drop in the platform's overall cryptocurrency trading revenue - from $31 million. in the previous quarter to $23 million, a drop of 26%. In a year-over-year comparison, Robinhood's decline in cryptocurrency revenue was even more dramatic: a 55% drop from $51 million in 2022.
The amount of cryptoassets held on behalf of clients decreased approximately 11% from the previous quarter, from $11.5 billion to $10.2 billion, but there was a 9% year-over-year increase from $9.4 billion.
In addition to the cryptocurrency drop, Robinhood reported a 4% decline in revenue from the previous quarter, from $486 million to $467 million. The company's loss of $85 million for the third quarter, a loss per share of nine cents, was below analysts' estimates. Dear All of two cents. In the second quarter of 2023, Robinhood posted a profit of $25 million. Shares plunged as much as 7.5% to $9.03 in after-market trading.
Robinhood's plan to expand cryptocurrency trading in Europe follows company announcement expansion in the UK earlier this year. It is also one of the most ambitious crypto announcements to come out of the company since it unveiled its crypto wallet in 2022, especially as the brokerage has reduced its offerings in the US following enforcement actions by the Securities and Exchange Commission.
In June, the SEC sued Coinbase and binance, two of the largest crypto exchanges in the world, and argued that they allowed users to trade unregistered securities, including tokens for the Solana, Polygon, and Cardano blockchains. Days later, Robinhood removed from list the tokens of your crypto trading platform.
And in August, Robinhood and Jump Crypto, one of the largest cryptocurrency market makers to gain scrutiny from the SEC for his association with TerraUSD creator Do Kwon, were reportedly We no longer do business together.
When asked about the slowdown in the cryptocurrency market in an investor call following the release of third-quarter earnings, Tenev, the CEO, said that "we are focused on using this as an opportunity to develop our capabilities to build our platform".
However, he said he believes the expansion of cryptocurrency trading in Europe, where "regulatory clarity," he said, will allow Robinhood to "offer a different set of assets" compared to the US, will open up the cryptocurrency business. of the brokerage to hundreds of people. of millions of new users.
As for the United States, Tenev said Robinhood is still waiting for guidance from the government. It would be a shame, he said, if innovation in the cryptocurrency market โis co-opted abroad.โ
Update, November 7, 2023: This article has been updated with additional comments from Tenev.
