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Robinhood’s remarkable cryptocurrency trading revenues from the last quarter of 2024 are not expected to be replicated in the first quarter. The significant increase in transaction-based income observed by the company hints at a potential slowdown, given the uncertainties in market conditions and the decline in crypto asset volumes.
Declining Interest in Cryptocurrencies
JPMorgan analyst Kenneth Worthington noted that Robinhood users might have seen their trading volume drop from approximately $71 billion in the last quarter to $52 billion in the first quarter. This decrease correlates with the general decline in trading volumes amid a risk-averse environment.
Kenneth Worthington: “The market downturn has adversely affected both the stock and crypto asset markets.”
Worthington emphasized that the declines experienced towards the end of the quarter in both the crypto market and the general stock exchange would be influential in these results.
JPMorgan’s Expectations
This dramatic 700% increase helps explain the surge seen in Robinhood’s transaction-based revenues in the last quarter. Despite the company experiencing a 41% annual increase in total assets, a decrease of about 5% compared to the previous quarter is anticipated.
Furthermore, the observed softening in demand for margin and derivative transactions in the first quarter could exert additional pressure on Robinhood’s overall performance. This pattern is also observed in other platforms operating similarly within the sector.
Regarding stock performance, the analyst pointed out that considering the trading price of $49, just below the current price levels, a downward movement of approximately 10% could be possible. This assessment reveals ongoing discussions about the company’s risk and reward balance.
Analysts’ opinions and statements are prompting investors to reevaluate the risks and opportunities within the digital asset market while providing insights into the overall state of the sector.
