Robinhood Reports Strong Q3 Performance Driven by Crypto Trading Boom

• Robinhood’s crypto division earned a record $268 million, quadrupling from last year.

• Overall transaction revenue surged 129% year-over-year, driven by digital asset trading.

The third quarter results of Robinhood Markets were impressive and far surpassed the expectations of Wall Street, driven by the massive expansion of its cryptocurrency trading division.

The cryptocurrency unit of the trading platform earned a record-breaking amount of $268 million in the quarter, which is four times higher than the amount earned last year. This increased trading activity in digital assets was the driving force in the overall growth in transaction revenue of the company of 129% year-over-year.

The total quarterly revenue was also higher by a comfortable margin at $1.27 billion compared to analyst estimates of $1.2 billion, and is a doubling of the previous year. The earnings per share of the company rose to 61 cents, surpassing expectations of 51 cents and increasing by 259% compared to the previous year.

Expansion Strategy Drives Growth

The strategic efforts that Robinhood has made outside the conventional stock trading have already started to pay off in a big way for the organization. The purchase of cryptocurrency exchange Bitstamp, which was closed in June, has enhanced the position of the platform in the retail and institutional market of digital assets.

Chief Financial Officer Jason Warnick disclosed that Bitstamp and the prediction markets business of the company are generating about $100 million in annualized revenue. These new businesses show that Robinhood has successfully diversified its main business of equity trading and has created several revenue streams that can be used to grow sustainably.

The stock of the company reacted favorably to the announcement of earnings, and it increased by 4.15% in the normal trading hours to end at $142.48 per share. After-hours trading however, experienced a slight decline of more than 2%, and the shares fell below the mark of $140.

CEO Vladimir Tenev discussed the expansion of the company’s prediction markets into other parts of the world, stating that the dual positioning of Robinhood in both traditional and cryptocurrency markets gives the company the flexibility. In terms of tokenized stock offerings, the company, Tenev, admitted that there are still certain interoperability constraints but was optimistic that these would be improved as the decentralized finance infrastructure matures.

The Robinhood stock has risen over 280% since the beginning of the year, but is still short of its all-time high of $152.46 on October 9.

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