Users’ enthusiasm for investment continues to decline, and Robinhood’s Q4 encryption business revenue decreased by 24% month-on-month
This article comes fromFortune, original author: BEN WEISS
Odaily Translator | Nian Yin Si Tang
Odaily Translator | Nian Yin Si Tang
U.S. stock brokerage Robinhood reported a sharp drop in cryptocurrency trading revenue in the final three months of 2022 compared with 2021, as its clients shunned the platform's crypto offerings amid an industry implosion.
In its fourth-quarter earnings report on Tuesday, Robinhood said trading revenue fell 20%. Fees collected by crypto businesses decreased sequentially to $39 million in the fourth quarter, down 24% from $51 million in the third quarter and $48 million a year earlier.
"We're now starting to see a lot of traction with some of the products we've launched, which gives us confidence that over time they can grow into significant lines of business." Robinhood CEO and Co-Founder Vlad Tenev in a statementexpress。
express
Shares of the online brokerage rose 5% to $11 in after-hours trading after the earnings report. Its shares are up about 30% so far this year, but down 21% from last year.
Robinhood has recently moved further into the cryptocurrency market.News, Jan. 20, RobinhoodOfficial Release of the Robinhood Wallet App
, allowing users to transfer, exchange cryptocurrencies and NFTs, and be able to act as a "Web3 browser". Robinhood said the wallet also offers other advanced features, such as connecting to decentralized applications and NFT marketplaces.
The wallet app will gradually open to its 1 million alternate users and is expected to become a competitor to MetaMask, Phantom and Coinbase Wallet in the future.
The Robinhood Wallet App is currently only available on iOS mobile devices. A Robinhood spokesperson said that Robinhood Wallet will be available to all iOS users in the coming weeks and months. An Android version will be available later this year.
However, the decline in crypto trading revenue shows that crypto-native and crypto-related companies are still struggling amid the bear market the industry has recently experienced.
Robinhood, founded in 2015 by Stanford graduates Vlad Tenev and Baiju Bhatt, makes most of its revenue from high-speed trading firms that pay users to execute on stock trades they submit through the brokerage.
Robinhood's fortunes soared early in the 2020 pandemic as millions of people, especially millennials and Gen Z, flocked to the Robinhood app to trade stocks. Because of its ease of use and relatively low fees, Robinhood has also become a hotbed of deals for the likes of GameStop, AMC Entertainment, and Bed Bath & Beyond. To the chagrin of stalk traders, Robinhood temporarily suspended trading in those stocks at the time in response to the sudden frenzy.With momentum in 2020, the company is trading at $38 per share in July 2021listing
. While its stock peaked at $55 at one point, it has plummeted since its IPO as established brokerages such as Vanguard or TD Ameritrade weighed in on the upstart.Just a month before Robinhood went public, the Financial Industry Regulatory Authority (Financial Industry Regulatory Authority) issued a June 2021 ban on the trading platform.$70 million in fines issued, due to the platform's outage in March 2020. In August 2022, Robinhood Crypto, an encryption division of Robinhood, was arrested by the New York State Department of Financial Services (NYDFS) for violating anti-money laundering (AML) and cybersecurity regulations.。
$30 million fine
After the earnings release, CNBCto reportto report
Robinhood’s board of directors approved a plan to buy 55 million shares of stock that FTX founder SBF bought last year, the sources said. SBF originally purchased the shares through Emergent Fidelity Technologies in May 2022. Emergent Fidelity Technologies, co-founded by SBF and former executive Gary Wang, has filed for Chapter 11 bankruptcy protection.
