Robinhood, the well-known American internet brokerage, recently announced that it will provide cryptocurrency trading services in the European Union. Despite a 55% decrease in revenue related to cryptocurrency in the third quarter of this year to $23 million, data from yesterday (4th) showed that the platform’s cryptocurrency trading volume increased by approximately 75% in November. Ark Investment holds an optimistic view on Robinhood’s overall financial situation and has increased its holdings of over 1.24 million shares of HOOD since the release of the third-quarter financial report, with its stock price rising by over 10% in the past five days.
(Table of Contents:
– Cryptocurrency trading volume increased by 75% in November
– Ark Investment accumulated over 1.24 million shares of HOOD
– HOOD rose by over 10% in the past five days
– Third-largest holder of Bitcoin, fifth-largest holder of Ether
)
(Background information:
– Robinhood confirmed as the third-largest Bitcoin wallet holder and the fifth-largest holder of Ether)
In a move seen as an attempt to revive its struggling cryptocurrency trading revenue, Robinhood, the popular US internet brokerage, confirmed on the 1st that it will begin offering cryptocurrency trading services in the European Union and is expected to fully open trading services to UK users by 2024.
In its Q3 financial report released on November 7th, Robinhood stated that revenue related to cryptocurrency in the third quarter decreased by 55% compared to the same period last year, amounting to $23 million. This decline comes after a decrease in revenue in the second quarter.
However, there may be signs of improvement as the cryptocurrency market started to recover with the rise of Bitcoin since mid-October. Early performance documents disclosed by the company yesterday (4th) showed that Robinhood’s customers deposited approximately $1.4 billion in net deposits in November.
In addition, the nominal trading volume for stocks and options contracts in November remained roughly the same as October 2023. However, it is worth noting that the nominal trading volume for cryptocurrencyRobinhood’s performance seems to be turning around as its user base expanded by approximately 75% in October compared to the previous month. The company is expected to release the complete operational data for November 2023 in the coming weeks.
Despite a decline in cryptocurrency revenue for two consecutive quarters, Robinhood’s overall financial situation has improved. In the third quarter, the company’s net revenue increased by 29% year-on-year to $467 million. This growth was primarily driven by a 96% increase in net interest to $251 million and an increase in other revenue, partially offsetting the decrease in trade-based revenue. The net loss for the third quarter was $85 million, or $0.09 per share, a significant improvement compared to a net loss of $175 million, or $0.20 per share, in the third quarter of 2022.
Perhaps due to the positive financial performance in the third quarter and the potential revenue growth from entering the UK and EU markets, Ark Invest, led by renowned investor Cathie Wood, has accumulated 1,245,920 shares of Robinhood stock (HOOD) through its ARKW, ARKK, and ARKF funds since the release of Robinhood’s third-quarter earnings report. Based on the latest closing price, the market value of these shares approaches $11.9 million. However, it is worth noting that Ark Invest reduced its holdings of HOOD by 398,788 shares, worth approximately $3.8 million, yesterday.
These developments may have influenced the stock price of HOOD, which saw a 2.47% increase during the day and closed at $9.55. After-hours trading shows a further increase of 4.19%. In the past five days, the stock has risen over 10%, gradually recovering from the previous month’s decline.
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