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Robinhood Reports 80% Drop in Crypto Trading Volumes

Robinhood Markets, Inc. (NASDAQ:HOOD), a major US commission-free stock trading and investing app, has reported a visible decline in active users, managed assets and crypto trading volumes in October 2022 compared to the same period a year earlier.

On Thursday, the zero-fee trading platform said that the number of monthly active users (MAU) stood at 12.5 million, raising 2% compared to September. However, the results are visibly lower compared to last year’s readings, moving down by 36% from 19.5 million.

A significant slump was also recorded under managed assets metric. Assets under custody (AUC) achieved $70.2 billion, raising 9% month-over-month (MoM), but declining 37% year-over-year (YoY) from $112 billion.

“Notional Trading Volumes – which are the primary driver of transaction revenues – were roughly flat in October from September 2022. Equities were $46.7 billion (up 0.4%), Option contracts were 78.7 million (up 1%), and Cryptocurrencies were $3.5 billion (down 2%),” Robinhood stated in the press release.

Once again, the results compared to last year are significantly worse. Trading volume for cryptocurrencies fell by 80% from $18 billion. Daily Average Revenue Trades (DARTs) reached $0.2 million for cryptocurrencies, losing 10% MoM and 55% YoY.

The only metric that rose in the yearly comparison was net cumulative funded accounts (NCFA), achieving 22.9 million and increasing by 2% from the 22.5 million reported in October 2021. According to Robinhood’s website, the NCFA shows the total number of newly funded accounts since inception, excluding ‘churned users’ (who have not interacted with the app within a more extended period).

Remember that the cryptocurrency market looked utterly different a year ago than it does now. In October 2021, bitcoin (BTC) grew 40% and reached the $67,000 mark. However, in October 2022, it moved up only by 5.5% and stood at $20,500.

The Negative Impact of FTX Turmoil

The prolonged ‘cryptocurrency winter’ is not the only problem the NASDAQ-listed company currently faces. The company’s stock price dropped heavily in November due to the collapse of the FTX exchange and worsening crypto revenues. All because the cryptocurrency mogul bought a 7.6% stake in Robinhood in May 2022, which has increased concerns about the company’s future.

Robinhood’s CEO, Vlad Tenev, tried to calm down concerned investors and said that the company’s operations were not at risk. “It is business as usual at Robinhood,” Tenev wrote in a Twitter post.

Despite Sam-Bankman Fried, the former CEO of FTX, having an equity stake in Robinhood, the company reassures it has no direct exposure to FTX, Alameda or any other entities directly connected with the falling empire.


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