Robinhood’s Strong Crypto Performance Sets Positive Tone for Coinbase Earnings

Coinbase shares rose 10% today after Robinhood’s Q4 2023 earnings report yesterday said that the popular trading app made a tidy profit from its crypto trading business.

Robinhood declared its transactions-based revenues in Q4 2023 rose 8% compared to the same quarter the preceding year.

In a press release, the company said its increased profit-taking was “primarily driven by cryptocurrencies revenue of $43 million, up 10%.” An accompanying presentation states that notional crypto trading volume rose by 89% compared to the previous quarter due to a 20% increase in customers placing trades, along with a 58% increase in estimated trading volume per trader.

Given the centrality of crypto trading to Coinbase’s operations, many suspect a similar success story in tomorrow’s report.

Meanwhile, Robinhood’s Chief Financial Officer (CFO) Jason Warnick said in the company’s quarterly earnings call that the US’s recently approved Bitcoin spot market ETFs currently account for about 5% of the total crypto trading volume on the platform.

Coinbase and Robinhood Make Plans

Coinbase may be fending off a lawsuit filed by the US Securities and Exchange Commission for allegedly selling securities without a license, but the NASDAQ-listed company has not let the heat derail its plans.

At the end of January, the exchange announced it added former British Finance Minister George Osborne to its advisory council. Given Osborne’s experience overseeing Britain’s financial system, the move is tactical on Coinbase’s part, as the exchange has outlined plans for global expansion.

This week, the company launched a collaboration with wallet provider Ledger to integrate Coinbase Pay into the Ledger Live mobile wallet application. This means Ledger users can now buy crypto on Coinbase directly through their Ledger app and have it custodied by Ledger too, streamlining and reducing errors in both the transaction and custody processes. 

Meanwhile, Robinhood is expanding its crypto offerings globally too. Back in December, it launched commission-free crypto trading in European Union territories.