In 2021, Robinhood was the hottest brokerage. Now, it seems like a ghost of its former self.
And there is no sight that things would change.
In contrast to its excellent performance over the same period in 2021, the fintech just published its first quarter results. Comparatively to a year ago, revenues in the first quarter decreased by 43 percent to $299 million. The company said in a press release that the decline was due to a decline of 48% to $ 218 million in revenue generated by transactions carried out by Robinhood customers.
In one year, the trading share has gone from 80.46% to 72.9% of revenues. Robinhood’s trading volume is down significantly according to this data. In one year, transactions related to options trading fell by 36% to $127 million. It was then the carnage for crypto and equity-related operations that made Robinhood famous and helped to prepare it for success.
In the first quarter of 2021, cryptocurrency trading revenue dropped 39% to $54 million. Revenue from equity trading dropped 73% to $36 million compared with last year.
The trading app was popular with Gen Zs trying out finance for the first time. These young traders were particularly united in their support for outdated business models like GameStop and AMC Entertainment. The same traders had contributed to the euphoria around cryptos, like bitcoin and ethereum, which reached all-time highs last November.
The sharp drop in active users recorded by Robinhood is one of the most concerning signs now with Robinhood. The number of monthly active users (MAU) decreased by 10% to 15.9 million in the first quarter. The firm recorded 17.7 million MAU during the first three months of 2021, “during which we experienced high trading volumes and account sign-ups as well as high market volatility, particularly in certain sectors.”