Anticipated Surge in Crypto Activity and Robinhood’s Impact
The final three months of 2024 are poised to witness significant developments in the cryptocurrency market, largely driven by the performance of the trading app Robinhood (HOOD). Analysts are predicting a substantial rise in user engagement, particularly in the lead-up to and following the election of Donald Trump in November. According to estimates from FactSet, this surge could translate into a remarkable 440% increase in Robinhood’s cryptocurrency trading revenue, bringing it to an impressive $345.5 million.
Over the past year, HOOD’s shares have skyrocketed by 350%, reflecting a resurgence of retail traders who have returned to the platform, fueled by expectations of a more favorable macroeconomic climate for both stocks and cryptocurrencies. Notably, in just the first six weeks of 2025, Robinhood’s shares have already risen by 37%.
In terms of overall financial performance, Robinhood’s revenue for the fourth quarter is projected to reach $934.9 million, a significant increase from $660.5 million in the previous quarter. Additionally, analysts expect earnings per share to improve, with forecasts indicating a rise to $0.41, compared to $0.18 in the last quarter.
The trading data released by Robinhood is frequently utilized by analysts to gauge the trading volume of Coinbase (COIN), which has historically shown correlation with HOOD’s metrics. Analyst Benjamin Buddish from Barclays has reported that Robinhood experienced robust growth in reported crypto volumes, estimating total volumes of approximately $69 billion through December 27. This figure marks an astounding five-fold increase compared to the previous quarter and a six-fold increase year-over-year.
As a result of this impressive performance, Buddish anticipates that Coinbase’s retail trading volume will exceed $108 billion, even when accounting for a more conservative “beta” for those retail volumes. The correlation between Coinbase and Robinhood’s trading volumes is evident, as both platforms are integral to the retail trading landscape.
Coinbase is set to announce its fourth-quarter earnings on Thursday after the market closes, and it is expected to report one of its strongest quarters in terms of trading volume to date, with revenue estimates reaching $1.8 billion, according to FactSet. Analysts project earnings per share to be around $1.99, a significant increase from $0.41.
The performance of COIN shares is likely to be influenced by the results of Robinhood’s earnings report, as investors anticipate a similarly positive outlook from the cryptocurrency exchange. Over the past year, Coinbase’s stock has surged by 90%, with current trading around $269.88. In contrast, Robinhood’s stock has experienced an even more remarkable growth of 370%, currently trading at approximately $54.33.
