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Q1 Bull Market Prompts 224% Surge in Robinhood's Crypto Trading Volume

Robinhood's 224% crypto trading volume resulted in a 232% increase in crypto-related revenue to $126 million

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Retail-focused crypto and equities trading platform Robinhood saw its crypto trading volume jump 224% in the most recent quarter.

In its Q1 report, Robinhood stated that almost 40% of its transaction-based revenue of $329 million came from crypto trading. This increase in volume led to a 232% increase in crypto-related revenue to $126 million.

Overall, the platform posted its second profitable quarter in a row with a net income of $157 million.

As of 31 March, Robinhood has $26.2 billion in user's crypto in custody, marking a 78% jump from the end of 2023.

The firm's Q1 performance exceeded expectations with its $618 million revenue beating a $534.5 million estimate from Zacks and analysts' estimates of $552.7 million according to FactSet data.

Robinhood's earnings come in the same month as the SEC landed the firm with a Wells Notice.

"On May 4, 2024, RHC (Robinhood Crypto) received a 'Wells Notice' from the Staff of the SEC (the 'Staff') stating that the Staff has advised RHC that it made a 'preliminary determination' to recommend that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934, as amended," Robinhood said in a filing on Monday.

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Robinhood has joined the SEC’s Wells Notice Club alongside Ripple, Coinbase, Consensys, and Uniswap

In the Q1 earnings call, Robinhood CEO Vladimir Tenev called the SEC notice a “disappointing development.”

Robinhood chief financial officer, Jason Warnick, added that the firm has taken a cautious stance in its coin listings and services, applying equivalent legal and compliance standards to its crypto business as it does to its brokerage business.

"We're going to defend the firm and continue to advocate for our customers," Tenev added.

Robinhood's impressive earnings follow similar news from crypto exchange Coinbase, which also beat analysts' expectations in its Q1 report.

Revenue came in at $1.64 billion, exceeding analysts' expectations of $1.34 billion. Net income totalled $1.18 billion, compared to a $78.9 million loss from last year.

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