With strong performance, Robinhood Markets, Inc.. announced that its cryptocurrency trading-based revenues increased 161% year-over-year to $81 million in Q2. The surge came amid a significant increase in trading volumes, reflecting growing investor interest in cryptocurrencies.
Cryptocurrency returns outpace stocks
Robinhood’s crypto revenues far outpaced its stock returns during the second quarter, showing the growing dominance of digital assets in the trading landscape. The online brokerage’s crypto trading volume soared to $21.5 billion, up 137% from Q2 2023. However, that figure is down 40% from Q1 2024, indicating some market volatility.
Fluctuating user engagement
Robinhood CEO Vlad Tenev attributed the fluctuations in trading volume and revenue to changes in monthly active user engagement, which tends to spike during bullish crypto markets and decline when prices fall. The platform experienced a 27% decrease in total customer trading, while the average notional volume per trader fell 18%, reflecting these market dynamics.
Despite the fluctuations, Robinhood’s $81 million in crypto revenue significantly outpaced its stock gains for the quarter. However, the company’s biggest source of revenue came from options trading, which brought in $327 million.
Expanding cryptocurrency custody and strategic acquisitions
Robinhood reported that it has $20.6 billion in crypto assets under custody, up 57% year-over-year. The growth was driven by net deposits and rising crypto values.
The company has also made strategic moves to strengthen its position in the cryptocurrency market, including an agreement to acquire Bitstamp, a cryptocurrency exchange with over 50 active licenses and registrations worldwide. The $200 million acquisition, expected to be completed in the first half of 2025, aims to strengthen Robinhood’s global presence in the cryptocurrency industry.
also, robin hood In Q2, we acquired Pluto Capital, an AI-based investment research firm, further strengthening our capabilities in artificial intelligence and machine learning, further strengthening our commitment to innovation.
Challenges and regulatory review
Despite the positive financial performance, the company faced some challenges. The company’s 24-hour market execution venue, Blue Ocean ATS, was temporarily suspended due to the market downturn, raising concerns among investors.
Robinhood’s crypto division also received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) in May, indicating potential enforcement action for alleged violations of U.S. securities laws. Robinhood’s chief legal, compliance and corporate affairs officer Dan Gallagher strongly disagreed with the SEC’s preliminary ruling, stating that the assets listed on the platform are not securities and expressed confidence in their legal standing.