BREAKING: Robinhood Considers Launching Crypto Futures in US and Europe

Robinhood Markets is reportedly exploring the introduction of cryptocurrency futures trading in the US and Europe.This move is part of a broader strategy to diversify its offerings and leverage recent acquisitions to enhance its position in the competitive crypto market.

Robinhood’s Crypto Futures Ambition

Cryptocurrency trading platform Robinhood is reportedly considering listing crypto futures in the US and Europe. According to a Bloomberg report, the platform aims to introduce futures trading “in the coming months.” This ambitious plan involves leveraging the licenses acquired from its $200 million purchase of the Bitstamp crypto exchange, which is expected to close next year.

Once its $200 million acquisition of Bitstamp Ltd. closes next year, Robinhood is hoping to use the Luxembourg-headquartered crypto exchange’s licenses to offer perpetual futures for Bitcoin and other tokens in Europe.

— Tree News (@News_Of_Alpha) July 2, 2024

Utilizing Bitstamp’s licenses would enable Robinhood to offer perpetual futures for Bitcoin and other digital assets. The strategic expansion into the futures market reflects Robinhood’s commitment to diversifying its offerings and staying competitive.

Anonymous sources have indicated the company’s interest in launching CME-based futures for Bitcoin (BTC) and Ethereum (ETH).

However, a spokesperson for Robinhood stated, “We have no imminent plans to launch these offerings,” suggesting that while discussions are ongoing, the final plans are not yet set.

The consideration of listing crypto futures comes amid a significant increase in demand for crypto derivatives. Since the approval of spot Bitcoin ETFs in January, derivatives trading volumes have surged, reaching $3.69 trillion, significantly higher than centralized spot trading volumes of $1.57 trillion.

By moving into the futures market, Robinhood aims to capitalize on this growing interest and provide its users with more diverse trading options.

Currently, Robinhood Crypto is available in 50 US states, the Virgin Islands, and Puerto Rico. In July, the company expanded its trading services to include 15 assets across all US territories, such as Bitcoin, Ethereum, Dogecoin, and Avalanche.

Robinhood has experienced a significant surge in crypto trading volumes in the first quarter, with a 224% increase to $36 billion.

This growth drove the company’s transaction-based revenue up by 59% year-over-year to $329 million, with crypto-related revenue alone rising by 232% to $126 million. Robinhood also announced it held $26.2 billion in users’ crypto assets as of March 31, marking a 78% increase from the end of 2023.

The increased interest in cryptocurrencies contributed to Robinhood’s strong financial performance. It exceeded expectations with $618 million in revenue and earnings of $0.18 per share, leading to a 7% increase in post-market trading of its shares.

Regulatory Challenges

Despite its success, Robinhood faces regulatory challenges in the crypto space. Earlier this year, the company received a Wells Notice from the SEC, signaling potential enforcement action over tokens traded on its platform.Robinhood Markets announced plans to contest allegations of securities violations brought by the US Securities and Exchange Commission (SEC).CEO Vlad Tenev criticized the SEC’s actions as part of a broader regulatory effort that stifles innovation and impacts American firms and investors.The SEC’s probe focuses on possible violations of cryptocurrency listings, custody, and platform operations and could lead to civil and administrative proceedings, including cease-and-desist orders and financial penalties.In response to the SEC’s scrutiny, Robinhood Crypto previously halted support for specific tokens deemed securities, affecting US users’ access to altcoins like Cardano (ADA), Polygon (MATIC), and Solana (SOL).