April 18, 2024

Bitcoin ETFs are now the trending topic in the crypto market, attracting a large volume of liquidity. While some believe that it may disrupt direct BTC trading, Robinhood CFO Jason Warnick thinks it wouldn’t. 

In a recent report by the firm, Warnick shared his belief that direct Bitcoin trading remains more popular than ETFs. The CEO made this statement based on the impressive Q4 2023 financial results of the exchange. 

Bitcoin ETFs have attracted over $10 billion in investment revenue since launching, moving BTC’s price above $50,000 briefly on February 12. However, according to Jason Warnick, Robinhood traders still conduct the bulk of their trading with spot Bitcoin.

Therefore, the ETFs have not affected regular trading on the Robinhood platformA report on Robinhood’s earnings on February 13, for Q4, 2023, revealed that only 5% of cryptocurrency trading on the platform is from Bitcoin ETFs.

Impressively, 95% of the trading volume comes from direct spot Bitcoin trading. 

According to Warnick, the trading activity noted in the report was mostly additive or buy trades. 

Robinhood Revenues Surpasses Expectations

Robinhood recorded impressive revenues in 2023, especially in the last quarter (Q4). The revenue was boosted by crypto transaction revenue, and Robinhood’s stock price increased by 10% in after-hours trading. 

According to the earnings report released, the full-year 2023 earnings were $1.87 billion, a 375% increase in the year-to-year ratio.  

So, the Q4 revenue earnings were $471 million, a 24% increase from the value in 2022 and surpassing estimates by over 3%. Robinhood gives credit to an increase in crypto trading revenue as the major factor driving this increase.

Crypto trading revenue reached $43 million in Q4, 2023, an increase of 10% from last year. 

According to the report, the crypto trading volume in Q4 was up by 89% from the returns recorded in Q3. An increase in customers and overall trading volumes led to impressive results. Also, Robinhood shares closed at 1.5% on February 13 but increased by over 10.5% to trade above $13 in after-hours trading.  

Also, customers increased their investments within the period captured in the report to benefit from Robinhood’s three-month 1% bonus promotion. During this period, over $3 billion of assets was transferred from other competitors to Robinhood. 

Notably, Robinhood added 11 Spot Bitcoin ETFs on January 11, after their approval by the SEC, attracting even more investors. As a result, Robinhood Markets Inc. recorded quarterly earnings of $0.03 per share and a 400% increase in revenue.

Therefore, crypto prices are likely to influence other markets, such as the stock market, based on Robinhood’s improved revenue.  

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