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Robinhood Markets Inc (NASDAQ:HOOD). reported a record-breaking quarter for its cryptocurrency revenue, which soared to $360 million, marking an almost fivefold increase from the third quarter’s $61 million.
This surge in revenue represents the highest crypto revenue quarter for the trading platform, surpassing its previous peak of $126 million in the first quarter of 2024.
The significant revenue jump in the fourth quarter now accounts for nearly 40% of Robinhood’s total quarterly revenue, doubling from approximately 20% in the third quarter of 2024. This growth has been attributed to the company’s expanded cryptocurrency offerings, which now include a variety of tokens such as BONK, WIF, and TRUMP, in addition to established cryptocurrencies.
Unlike some competitors that rely on commission fees, Robinhood generates its revenue primarily through trading spreads. This model is common among retail-focused exchanges and has contributed to the platform’s recent success in the digital currency market.
Although Robinhood has not provided specifics on which tokens contributed most to its trading volume, competitor Coinbase (NASDAQ:COIN) released a more detailed report following its earnings announcement.
According to Coinbase, Bitcoin accounted for 27% of its trading volume in the fourth quarter, Ethereum for 10%, USDT for 15%, and other cryptocurrencies made up the remaining 48%.
This distribution of trading volume indicates a growing interest among retail traders in a diverse range of cryptocurrencies beyond the major assets. Despite Robinhood’s impressive quarter, Coinbase continues to lead the market with a total trading volume of $440 billion, overshadowing Robinhood’s $71 billion. The close competition between the two platforms suggests a narrowing gap that few had expected.
Robinhood’s inclusion of memecoins has been a significant factor in measuring retail participation in the crypto markets. While these tokens often drive short-term user engagement and speculation due to their volatile nature, it remains to be seen whether the increased trading volumes will persist into the next quarter, indicating a more sustained shift in retail investor behavior.
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