The Rise in Crypto Trading Volume on Robinhood

Robinhood, the popular crypto-friendly trading platform, has reported a significant increase in digital asset trading volume in November. According to an 8-K filing to the Securities and Exchange Commission, Robinhood noted that the “November Crypto Notional Trading Volumes were roughly 75% above October 2023 levels.” However, this increase in activity did not translate to equity and options contract trading volumes, which remained mostly flat compared to October.

This surge in crypto trading volume marks a reversal for Robinhood, as the company had previously reported a 55% decrease in cryptocurrency notional volumes over the year in its Q3 results filing. This decline in crypto volumes had a negative impact on the company’s Q3 revenue, which came in below analyst estimates at $467 million. Transaction-based revenues also declined by 11% year-on-year to $185 million.

Despite the previous decline, Robinhood could be eyeing a more profitable fourth quarter due to the recent rally in the crypto market. Over the past two months, the total capitalization of the crypto market has surged by 40% to reach $1.6 trillion. Robinhood co-founder and CEO Vlad Tenev expressed optimism during a November earnings call, stating that the platform could eventually generate “nine figures” in annual revenue.

Tenev further elaborated on the growing interest in crypto among retail investors in an interview with Yahoo Finance. He stated, “You’re starting to see retail investors wake up to certain segments of the rally, and in crypto activity, you’re seeing a groundswell. What tends to happen is, as we’ve seen in the past, as the price of Bitcoin approaches all-time highs, the media coverage and intensity increases.”

Despite the positive news regarding increased crypto trading volume, Robinhood’s stock price has been on a downtrend since mid-July. The company’s stock, known as HOOD, is currently priced at $9.95 in after-hours trading after gaining 2.5% daily. However, HOOD prices have only risen by 18% since the beginning of 2023.

In addition to its plans to expand into the U.K. market and launch equities trading, Robinhood also intends to introduce futures trading in 2024, pending regulatory approval.

It is worth noting that Robinhood had accumulated 118,000 BTC worth around $3 billion as of August 2023, according to a previous report by Cointelegraph.