Robinhood, an American financial services company, witnessed a significant surge of 224% in its first-quarter cryptocurrency trading volume, escalating it up to $36 billion. The firm’s CEO, Vladimir Tenev, revealed these facts during an earnings call. Cryptocurrency services accounted for roughly 40% of Robinhood’s transaction-based revenue, which totaled $329 million. It also assisted the firm in achieving its second consecutive profitable quarter, with a final net income of $157 million.
Despite these impressive financial results, the company recently received a Wells notice from the US securities regulator. The notice primarily addresses the firm’s cryptocurrency listings and custodial operations, which Tenev labeled as a “disappointing development.” Robinhood’s CFO, Jason Warnick, added that the firm has maintained a conservative stance on its coin listings and services and aligns its cryptocurrency business with the same regulatory and compliance norms as its brokerage operations.
Regardless of these challenges, Robinhood’s first-quarter performance exceeded the predicted outcomes across the industry. Robinhood’s reported revenue of $618 million topped investment research firm Zacks’ estimates by 15.6%, which had forecasted $534.5 million. The announcement triggered a short-lived rise in the firm’s shares, with a peak increase of 7.3% to $19.15 in after-hours trading. However, the rally later dissipated, with share prices dropping to $18.55.
Furthermore, Robinhood reported a surge of 78% in the custodial value of client cryptocurrencies from last quarter, taking the amount to $26.2 billion. The considerable increase can be partially attributed to soaring market prices during the period, with Bitcoin’s value skyrocketing by 65.1% to reach $69,700. Since its establishment in February 2018, Robinhood’s cryptocurrency unit has branched out its trading offerings to include Bitcoin, Ethereum, Litecoin, Uniswap, Avalanche, Chainlink, among others.