Robinhood looks to jumpstart crypto trading revenue via EU expansion

The investing app’s crypto trading revenue had dropped by 55% in the third quarter, but its volumes rebounded in November


Robinhood CEO Vlad Tenev | Permissionless I by Blockworks


Investing app Robinhood has expanded its crypto trading offering to the European Union, though analysts note it is entering a crowded market. 

The platform supports 25 cryptocurrency assets. Customers receive a monthly bitcoin rebate, based on a percentage of their total trading volume, as announced by the company on Thursday.

Owen Lau, executive director at Oppenheimer & Co., called the EU “a competitive market” — noting existing players serving the region include Bybit, OKX, Kraken, Coinbase, eToro, and Binance.  

But after the collapse of crypto exchange FTX last year and Binance’s settlement with the US Department of Justice, some customers may look to move funds to a more reputable platform, he added.    

Robinhood noted in its Monday blog post that it has chosen to take “a more conservative approach” than competitors when it comes to supporting digital assets.

“[As] a public company listed in the US, it may give them an advantage to take some share in the EU,” Lau said. “But it is unclear how much return on investments they can generate from this expansion.”

Robinhood CEO Vlad Tenev said during the company’s earnings call last month that crypto benefits from “a relatively clear regulatory framework” in the EU.

Read more: Why crypto companies are flocking to Ireland ahead of MiCA

Launching in Europe “will expand the addressable market of customers that we serve by hundreds of millions,” Tenev added at the time. 

The launch comes after Robinhood’s transaction-based revenues on cryptocurrencies declined to $23 million during the third quarter — a 55% quarter-over-quarter drop. 

It wasn’t the only company to see such a slowdown. In Q3, Coinbase’s total transaction revenue fell 12% from the prior three-month period. Analysts pointed to weakness in cryptocurrency markets and low volatility as reasons for such declines.

Robinhood has reported more recent momentum on the digital asset front amid a crypto rally in recent weeks. Its November crypto notional trading volumes were roughly 75% above their October levels, according to a Monday filing

Morningstar analyst Michael Miller noted Robinhood’s launch of EU crypto trading is part of a broader expansion. The company last week rolled out brokerage services for customers in the United Kingdom.

“I would see the two moves as being tied together,” Miller indeed. “That said, it’s hard to tell how successful this will be for the company since it is entering a crowded market as a relative newcomer.”

Miller added that crypto trading revenue made up roughly 7% of Robinhood’s net revenue in the first nine months of this year. 

“So being able to expand its cryptocurrency business to the EU would be helpful,” the analyst said. “But I don’t know if the impact would be that dramatic unless it significantly outperformed its US operations.”

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