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Robinhood to Report Big Quarterly Earnings, Joins Crypto Fight Against SEC
Trading app Robinhood Markets is set to report its highest quarterly revenue in nearly three years, helped by a rally in stocks and crypto trading in the first quarter. Robinhood shares are up 58% in the first three months of the year, with analysts including brokerage Bernstein previously giving an outperform rating and a $30 price target to Robinhood (HOOD).
Robinhood Set for Better Quarterly Earnings
Robinhood Markets will release its first-quarter earnings in a conference call on May 8. The company expects a further increase in revenue due to the steady recovery in stock markets and crypto trading.
Crypto Market Recovery Caused Bitcoin reached an all-time high and bets on global interest rate cuts sent US stocks soaring in the first quarter. This helped the retail investor-focused brokerage earn more transaction-based revenue, it said. Reuters.
“In the core business, we saw a significant recovery in volumes this quarter across equities, options and crypto, with total volumes increasing nearly 20% in the first quarter to metrics reported in February,” JPMorgan analysts said.
Robinhood’s daily active users increased 65% in March from a year earlier, according to data from research firm Apptopia. Meanwhile, total new mobile app downloads also increased by 94% during the same period.
According to LSEG data, net interest income is expected to increase by 24% to $258.24 billion. Analysts forecast a 24% increase in revenue to $548.61 million. Online brokerages like Robinhood have seen huge growth in trading volumes and margin loan balances.
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Robinhood joins the fight against the SEC
Robinhood Crypto LLC received a notice of Wells from the US Securities and Exchange Commission (SEC) with cryptocurrency listings, crypto custody and platform operations issues in dispute.
Vlad Tenev, CEO of Robinhood, said: “Over the past three years, we have reached a state of regulatory attack that is harmful to American businesses and consumers.” The company has now joined others as “the SEC’s ongoing attack on cryptography, along with recent rule proposals like the one related to predictive data analytics, mark yet another inappropriate attempt by the administrative state to stifle innovation.”
Robinhood’s US coin offerings mainly include 15 tokens: AAVE, BCH, DOGE, LTC, XTZ, AVAX, LINK, ETH, SHIB, UNI, BTC, COMP, ETC, XLM, and USDC.
SEC Chairman Gary Gensler said Robinhood’s Wells Notice indicates that most cryptocurrencies are securities. He argued that investors are unaware of trading these cryptocurrencies and the regulations.
CAPO Price closed 1.18% higher at $17.99 on Tuesday, recovering from the drop seen after the SEC issued a Wells Notice.
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