Robinhood’s Q1 Crypto Revenue Rises Slightly From Previous Quarter
Robinhood Markets (HOOD) reported $54 million in crypto revenue during the first quarter of 2022, versus $48 million reported in the fourth quarter of 2021. The company reported $51 million in crypto revenue in last year’s third quarter, which was down from a record $233 million in the previous quarter.
The company’s securities and cryptocurrency businesses continue to operate at a loss, but its cash position is improving. HOOD reported that it ended the quarter with $367 million in cash comparedÂto $347 million at December 31, 2021. The firm has lost money on an operating basis since going public in 2019.
Robinhood is a popular no-fee trading app for stocks and ETFs. The company introduced cryptocurrency trading in February 2018 and it has been a cash cow for the Venice, California-based firm. While crypto revenue was down from the prior quarter, HOOD reported that sales of its premium product and margin lending had increased during the first quarter.
Robinhood also reported an adjusted earnings loss of 45 cents per share versus the consensus analyst estimate loss of 38 cents per share.
The company released a statement on Thursday that the net cumulative funded accounts increased to 22.8 million as of March 31 from 18.0 million in the year-ago quarter. Robinhood said the increase was “primarily driven by large customer interest in cryptocurrencies during the second quarter of 2021.”
It’s been a volatile year for cryptocurrencies. After hitting an all-time high in early January, Bitcoin crashed below $30,000 in early February and then rallied back above $60,000 in mid-March. Ethereum hit an all-time high above $2,000 in late February and has since pulled back to around $2800.
Despite the volatile price action, Robinhood continues to see growing interest from customers in buying and trading cryptocurrencies on its platform. The company said it’s averaging more than $20 million a day in volume across both Bitcoin and Ethereum futures contracts, while other top exchanges’ trade volumes are far smaller than that.
On its earnings conference call Thursday, Robinhood said it has been refining core crypto infrastructure to “effortlessly” custody and support new coins, tokens and chains. CEO Vlad Tenev said this initiative is part of a process that began last year and Robinhood will soon be able to add new coins with “relatively minimal effort.”
Robinhood continues to expand its operations, recently purchasing London-based crypto platform Ziglu, which is approved to offer crypto services in the U.K. Robinhood also added tokens SHIB, SOL, Polygon’s MATIC and Compound’s COMP to its platform for users after activating its crypto wallet for two million “eligible” customers, making digital asset transfers broadly possible in the long-firewalled investments app.
Robinhood’s expansion into the crypto world has been a huge success, with many users already flocking to their platform and taking advantage of the low trading fees and streamlined interface. While more traditional platforms like Coinbase and Binance have struggled to keep up with user demand in recent months, Robinhood has managed to maintain steady growth.
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