Bitcoin ETFs haven’t replaced bitcoin trading – Robinhood CFO

Robinhood's traders have not taken to looking at Bitcoin exchange-traded funds (ETFs), the platform's wholesale trading of crypto remains in place of Bitcoin, according to the company's chief financial officer.

On the February 13 earnings call for Robinhood's fourth quarter (Q4) 2023 results, Jason Warnick said that only 5% of consumer crypto trading occurs through Bitcoin (BTC) ETFs, while the remaining 95% prefer direct Bitcoin trading.

“We saw that it was mostly increasing. There were some traders selling from the market. [trading] We've got Find and ETF, but that was really unique,” ​​Warnick said. “In general, we don't see this as cannibalism. It's an addition.”

Warnick added that “some of the choices” in the bitcoin ETFs on the platform were Robinhood traders adding the ETF to their retirement accounts. The platform offers all 10 US spot Bitcoin ETFs that went on sale on January 11.

The new spot-listed Bitcoin ETFs have added more than $10 billion in assets under management since their launch, with the price of Bitcoin jumping 6.5%, briefly surpassing $50,000 on Monday, February 12 – the highest point in more than two years.

Robin Hood's Crypto Earnings Soar, Beating Estimates

Robinhood sees its revenue for 2023, particularly in Q4, boosted by increased crypto trading revenue. The company beat Wall Street analysts' estimates and saw its share price jump more than 10% in afternoon trading.

Robinhood's Q4 and full-year 2023 revenue through Dec. 31, 2023, showed annual revenue of $1.87 billion, up 37 percent year-over-year. Q4 revenue came in at $471 million, up 24 percent from a year ago, beating Zacks analyst estimates by more than 3 percent.

Related: How Bitcoin ETFs Affect the Average Investment Portfolio

The trading platform posted the jump in total Q4 revenues primarily on an increase in crypto trading revenue, which reached $43 million in the same time frame, a 10% year-over-year increase.

In its earnings presentation, Robinhood said that virtual crypto transaction volume in Q4 was up 89% over Q3, driven by growth in the number of customers and overall transaction volume.

Shares of Robinhood closed up around 1.5% on February 13, but jumped 10.5% to more than $13 in after-hours trading on Google Finance.

The stock has struggled year-to-date, down more than 78% from $55 on Aug. 6, 2021, compared with a nearly 4.5% gain posted by the S&P 500.

Big questions: How can Bitcoin payments generate returns?