Robinhood Q2 crypto revenue surges 161% on rising trading volume

Online brokerage platform Robinhood’s crypto transaction-based revenues increased 161% year-on-year to $81 million in the second quarter amid a rise in trading volume.

The $21.5 billion in trading volume was a 137% increase from Q2, 2023, but a 40% fall from the Q1, 2024, the trading firm revealed in its Q2 financial statement on Aug. 7.

Robinhood attributed this to a downward swing in monthly active users in Q2 as crypto prices fell.

“When the crypto markets are hot there's a huge immediate spike in monthly active user engagement metrics but then when crypto cools down that tends to drop more,” a Robinhood spokesperson said.

As a result, Robinhood saw a 27% drop in total customer trades and 18% fall in the average notional trading volume per trader.

Still, Robinhood’s $81 million from crypto revenues was more than double what it made from equities in Q2.

The largest revenue stream was options, which which accounted for $327 million in recenue.

Robinhood now holds $20.6 billion in crypto assets under custody — marking a 57% year-on-year increase.

This has been driven by more net deposits and higher crypto valuations, Robinhood noted.

In June, Robinhood announced an agreement to acquire crypto exchange Bitstamp, which has more than 50 active licenses and registrations worldwide.

The firm’s CEO Vlad Tenev said the crypto industry would “fundamentally reorganize the financial system” when explaining the company’s acquisition at the time.

The $200 million acquisition is still subject to regulatory approval but is expected to be finalized in the first half of 2025.

Meanwhile, Robinhood furthered its artificial intelligence ambitions in Q2 by acquiring AI-powered investment research firm Pluto Capital.

Robinhood (HOOD) stock fell 0.52% to $17.12 on Aug. 7 but is up 2.86% since the firm’s Q2 results came out in after-hours trading, Google Finance data shows.

Not everything crypto-related is running smoothly at Robinhood though.

Eyebrows were raised earlier this week when Robinhood’s 24-hour market’s execution venue, Blue Ocean ATS, was temporarily suspended amid a double digit market downturn.

Robinhood’s crypto unit was served a Wells Notice from the United States securities regulator in May — signaling its plan to file enforcement action against the trading platform.

The Securities and Exchange Commission made a “preliminary determination” that Robinhood breached US securities laws.

Dan Gallagher, chief legal, compliance and corporate affairs officer at Robinhood Markets, strongly disagreed with the decision.

“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”