According to Bloomberg News, Robinhood Markets Inc. stated that users are exercising caution about what they are investing this year amidst a macro environment that is quite challenging, weighing on the revenue obtained from the cryptocurrency trading.
The looming uncertainty in the crypto market
Crypto revenue in the first quarter dropped by 39% compared to a year earlier to $54 million, according to the online brokerage service provider on Thursday. That had missed the $56.1 million average estimate of 11 analysts when Bloomberg conducted a survey. The total net revenue slid 43% in comparison to a year ago. The shares were found tumbling by 11% in the post-market trading in New York at 6:15 pm.
Crypto is one of Robinhood’s top priorities. Revenue from crypto contributed 18% to the total net revenue, which was an increase compared to the earlier quarter by 13%. Four new coins were added, namely, Compound, Polygon, Solana, and Shibu Inu, following requests from clients. The company has stated its intention to add more coins.
Crypto wallet, of late, rolled out for all its users and is a long-term driver of new clients to the crypto platform that it owns; however, it is not a revenue driver, as per Tenev while talking over a call.
According to Chief Executive Officer, Vlad Tenev, with the prevailing uncertainty in the market, the clients have become more cautious with their investment portfolios. Although crypto-related activity slid remarkably, they have been trading not so frequently and in smaller amounts for all asset classes.
As far as the history of Robinhood is concerned, it has been operating in an environment that has lower rates of interest, risking markets, and low inflation. But customers are experiencing the reverse trend now as such customers have become cautious as well, reported Bloomberg News.
