Key Insights
- Robinhood stock price retreated slightly after its earnings release.
- The company’s crypto revenue continued growing, outpacing that of Coinbase.
- Its quarterly revenue jumped by 100%, partly due to its acquisition of Bitstamp.
Robinhood stock price slipped by over 1% in the premarket session as market participants reacted to its financial results, which demonstrated that its business was growing. HOOD was trading at $141, down from the all-time high of $153. So, is it a buy as its crypto business booms?
Robinhood Crypto Revenue Growth is Accelerating
Robinhood, the fintech company that disrupted the stock market trading industry in the United States, has now become one of the fastest-growing companies in the crypto industry.
In a statement on Wednesday, the company said that its crypto business made $268 million in the third quarter, up by 300% from the same period last year.
This growth was much higher than the $86 million it generated in the stock market. It was also higher than that of other popular crypto companies. For example, the most recent numbers showed that Coinbase made $1.87 billion in the third quarter, up by 55% from the same period last year.
Robinhood’s crypto revenue growth was both organic and through acquisitions. Its most recent buyout was Bitstamp, a cryptocurrency exchange that handled transactions worth over $498 million in the last 24 hours.
The company has also increased the number of cryptocurrencies on its platform. Recent additions include popular names like Hyperliquid (HYPE), Aster (ASTER), Plasma (XPL), and Virtuals Protocol (VIRTUAL).
Crypto Revenue Helped to Diversify its Business
Robinhood’s crypto business has helped to diversify its revenue. The recent results showed that its total revenue rose by 100% in the quarter to $1.27 billion. This means that its crypto business has grown to play a significant role in its operations, a notable move for a service launched just a few years ago.
Robinhood’s crypto segment has overtaken its equities business, which made $86 million in the third quarter. Most notably, it is closing the gap with the options trading business, which generated over $304 million.
Still, the cryptocurrency business faces substantial risks, especially now that it primarily generates revenue through its transactions. In most cases, transaction revenue normally drops when there is a crypto market crash.
Other parts of Robinhood’s business are doing well this year, helping to justify its revenue growth. Its net interest revenue rose by 66% to $456 million as the total assets in the network jumped to $333 billion. The asset growth helped to offset the lower interest rates during the quarter.
Robinhood’s funded clients jumped to 26.8 million, while Gold subscribers soared by 1.7 million to 3.8 million. The company also continued to return cash to investors through buybacks, which have now totalled $810 million.
Therefore, Robinhood stock price dropped after the strong results as investors started to book profits since it is one of the best-performing companies in the United States this year. It is the best-performing company in the S&P 500 Index as it jumped by 270% this year. Also, there are substantial valuation concerns about the company.
Robinhood Stock Price Technical Analysis
The three-day chart shows that the HOOD stock price has been in a strong uptrend in the past few years as it became a major player in the crypto and options trading spaces.
Robinhood jumped from a low of $6.85 in 2022 to a record high of $153. It recently jumped above the important resistance level at $84, the highest swing in 2021 shortly after it went public.
Moving above that level confirmed the bullish outlook of the cup-and-handle pattern, a common continuation sign. HOOD stock was above the 50-day moving average as of press time.
The risk, however, is that the stock formed a small double-top pattern whose neckline is at $121.
Therefore, there is a likelihood that the stock will pull back in the coming months as it aims to form a break-and-retest pattern, which is a common continuation sign. Such a move could lead to more upside in the long term
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
