Robinhood's Crypto Trades Dominated by Spot Bitcoin, Q4 2023 Earnings Beat Expectations
Summary:
Robinhood's Chief Financial Officer, Jason Warnick, stated that 95% of the platform's crypto trading is in actual Bitcoin trades, with only 5% trading via Bitcoin ETFs. This was revealed during their Q4 2023 details call, which displayed an 87.5% YoY increase in crypto assets under care, taking the figure to $15 billion. The quarter also saw Robinhood's revenues boosted by heightened cryptocurrency transaction revenue, leading to it outperforming Wall Street forecasts.
Robinhood's Chief Financial Officer, Jason Warnick, revealed during a Feb. 13 results call for Q4 2023, that a majority of the platform's cryptocurrency trading is focused on actual Bitcoin trades rather than Bitcoin exchange-traded funds (ETFs). He stated that just 5% of crypto trades on Robinhood were through Bitcoin ETFs, while a whopping 95% were spot trading Bitcoin directly. He further opined that this did not signify a cannibalization of the market but was actually supplementary to it.
Year-over-year Q4 data shows an impressive 87.5% increase, bringing the platform’s crypto assets under care to $15 billion, according to Robinhood's data. The platform's users were reported to have added Bitcoin ETFs to their retirement accounts, courtesy of Robinhood's offering of all ten US spot Bitcoin ETFs, which went live on Jan. 11. These ETFs amassed assets exceeding $10 billion since their launch, concurrently with a 6.5% increase in Bitcoin’s price, briefly peaking at over $50,000 on Feb 12 – the highest in over two years.
The fourth quarter of 2023 saw Robinhood's revenues boosted by increased cryptocurrency transaction revenue, resulting in it exceeding Wall Street forecasts and an over 10% increase in its share price during after-market trading.
Annual revenues, rising 37% YoY, were approximately $1.87 billion, with Q4 revenue at $471 million - a YoY increase of 24%. This outperformed predictions by analysts at Zacks by over 3%. The Q4 revenue spike was predominantly attributed to a growth in cryptocurrency trading revenue, marking an increase of 10% YoY, reaching $43 million.
The firm’s Q4 crypto trading volume rose 89% from Q3 as a result of an uptick in both customer number and overall trade volumes. However, Robinhood shares dipped by about 1.5% on Feb. 13, then ascended by 10.5% to over $13 during after-market trading. 2023 has seen the platform's share price decline by more than 4%, in contrast to the near 4.5% gain exhibited by the S&P 500. Robinhood's stocks are down by over 78% from its Aug. 6, 2021, $55 high.
Published At
2/14/2024 9:05:22 AM
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