Crypto News: Robinhood Thrives Amid Ten Consecutive Fed Rate Hikes
The US Federal Reserve (Fed) has been increasing interest rates consistently for ten straight times since March 2022. As Reuters reports, the move has benefited the US-based brokerage firm, Robinhood, significantly.
Robinhood has already surpassed Wall Street’s revenue estimates thanks to the Fed’s 75-basis point rate hike in 2023, earning $208 million in net interest revenue for the first quarter of this year. The company’s revenue quadrupled since 2022.
Experts estimated Robinhood’s total revenue to be $424.53 million, but the company reported $441 million in the first quarter, a positive outcome for the company.
Andrew McGee, analyst at Third Bridge, commented that “the current rising interest rate environment has been a significant tailwind” for Robinhood.
In addition, Robinhood’s shares rose by 2% after announcing the launch of 24-hour trading for five days a week, as reported by Reuters. The company is also trying to regain control of 7.42% (around 55 million shares) that the former CEO of FTX crypto exchange, Sam Bankman-Fried (SBF), acquired last year.
However, according to Reuters, the number of Robinhood users declined by 4.1 million in the first quarter of 2023 compared to the previous year. The report further revealed a 5% decline in the company’s transaction-based revenue.
Despite these challenges, Robinhood is thriving under the favorable interest rate environment, generating significant revenue and introducing new features to attract traders.
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