Crypto-related revenue surged in the fourth quarter.Competition is heating up among fintechs for crypto customers.CEO Vlad Tenev touted crypto legislation as a bullish signal.Robinhood is thriving on digital assets. Crypto trades accounted for half the company’s transaction based revenues of $672 million in the fourth quarter, a 700% jump, according to annual results released on Wednesday.The performance contributed to a 58% jump in Robinhood’s net total revenue of $2.9 billion in 2024. Crypto also helped the brokerage record net income of $1.4 billion. “We can be a major player,” Johann Kerbrat, the trading app’s crypto boss, told DL News in January. Rivals circlingRobinhood’s boffo performance hits as President Donald Trump relaxes regulations on the industry and Congress moves to pass landmark legislation around stablecoins.Robinhood’s shares have skyrocketed 365% in the last 12 months, trouncing the 85% jump for Bitcoin. On Thursday, Bernstein, the market research firm, forecasted that Robinhood’s shares would about double in price by 2026.“We are further moving up our 2025E and 2026E estimates, led by crypto growth strategy and upgrading our price target to $105,” Bernstein wrote.Even though the 12-year-old company changed the way people invest by offering zero-commission trades, its crypto franchise will face stiffening competition in the year to come.Coinbase, the top crypto exchange in the US, is also flexing during this historic bull run. Analysts expect the company to report an 80% jump in revenue and a 57% increase in its earnings per share for 2024 when the company releases its results on Thursday.At the same time, Revolut, the UK-based fintech powerhouse, is expanding its crypto offerings to its 45 million customers with 210 “vetted tokens” and crypto payment card.The company, which recently obtained a British banking licence, sports a valuation of $45 billion. That’s within shouting distance of Robinhood’s $49 billion market capitalisation and Revolut has yet to go public.Crypto surgeEven so, Robinhood’s early adoption of crypto is clearly paying off now as crypto morphs into a mainstream asset class. “The past few weeks have been crazy,” Kerbrat said in January. Following Trump’s election on November 5, the notional value of Robinhood’s crypto trading volume surged 530%, to $35 billion, which was six times the level of the prior month.The volume has cooled since then, but just a little. The takeaway is plainly evident — crypto has become a growth engine for the Silicon Valley venture, which has 25 million customers. Over the past two years, the firm strengthened its crypto team, rolled out crypto trading services in Europe, and launched a stablecoin together with Kraken and Galaxy Digital.Analysts expect Robinhood to benefit in Trump’s second term.In a January note to investors, Morgan Stanley said a more favourable US regulatory regime will empower Robinhood to “participate more aggressi
Gio. Feb 13th, 2025
