Get ready for a potentially explosive earnings season as Robinhood’s Q4 financials may offer insight into Coinbase’s upcoming results. Analysts are expecting a significant surge in crypto revenue at Robinhood, which could translate to blockbuster numbers for Coinbase.
Robinhood’s Q4 Report Could Help Preview Coinbase Results
Crypto Trading Volumes Expected to Soar at Robinhood
Analysts are expecting overall crypto revenue at Robinhood to have soared to $345.5 million from $63.9 million in the previous quarter.
Crypto trading volumes refer to the total value of cryptocurrencies traded on various platforms within a given period.
According to data from CoinMarketCap, the global crypto market volume reached $2.1 trillion in 2021.
The top three exchanges by trading volume are Binance, Huobi, and OKEx.
Crypto trading volumes can be influenced by factors such as regulatory changes, economic conditions, and investor sentiment.
A significant increase in trading volume can indicate growing interest in a particular cryptocurrency or market trend.
Robinhood reports fourth-quarter earnings on Wednesday, and major action in crypto in 2024’s final three months is expected to show up in the results of trading app Robinhood (‘HOOD’). A surge in user activity leading up to and then following the election of Donald Trump in November has analysts expecting a 440% quarterly jump in HOOD’s cryptocurrency trading revenue.
The crypto trading revenue has experienced significant growth in recent years, driven by increasing adoption and interest in cryptocurrencies.
According to a report by CryptoCompare, the global cryptocurrency market capitalization reached $2 trillion in 2021.
The revenue generated from crypto trading has also increased, with some exchanges reporting a 10-fold increase in revenue between 2020 and 2021.
This growth is attributed to the rise of decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and institutional investment.
Estimated Revenue Growth at Robinhood
Shares of HOOD have soared 350% over the past year as retail traders have returned to the app in anticipation of a more favorable macro environment for stocks and crypto. Robinhood‘s overall revenue in the fourth quarter is estimated to land at $934.9 million, up from $660.5 three months earlier.
Trading Data Correlation Between Robinhood and Coinbase
Robinhood’s trading data, which is disclosed regularly by the company, is often used by analysts to estimate Coinbase’s (‘COIN’ ) trading volume. Analyst Benjamin Buddish at Barclays notes that the trading app saw very strong overall growth in reported crypto volumes with total volumes of roughly $69 billion through Dec. 27.
Coinbase trading volume refers to the total amount of cryptocurrency traded on the platform within a given time frame.
According to Coinbase's quarterly reports, in Q4 2020, the exchange recorded a trading volume of over $1.3 trillion.
This significant growth can be attributed to increased user adoption and the rising popularity of 'cryptocurrencies.'
The majority of trades on Coinbase are for Bitcoin, followed by Ethereum and Litecoin.
A high trading volume indicates liquidity and market activity, making it easier for investors to buy and sell cryptocurrencies.
Implications for Coinbase’s Earnings
As a result, Buddish sees Coinbase’s retail volume to land north of $108 billion, even assuming a lower ‘beta’ for those retail volumes. This could potentially lead to $1.8 billion in revenue and earnings-per-share at $1.99 versus $0.41.
Market Expectations for Coinbase’s Earnings
Coinbase, which announces fourth quarter earnings on Thursday after the close, is estimated to report one of its strongest quarter in terms of trading volume to date. Shares of COIN will likely be affected by Robinhood’s earnings in anticipation of a similar positive report from the crypto exchange on Thursday.
Market Performance of HOOD and COIN
Shares of ‘COIN’ are up 90% over the past year, currently trading at $269.88. HOOD, on the other hand, is up 370% over the same period, trading at $54.33 at press time.
- coindesk.com | Robinhoods Q4 Report Could Help Preview Coinbase Results
