Bitrabo Editorial
Robinhood, a cryptocurrency and stocks trading platform, has not been immune to the harsh cryptocurrency winter that has been affecting the industry. In a recent announcement, the company disclosed a significant drop in its trading volumes, due to the increased regulatory pressure on cryptocurrency firms.
Robinhood Crypto Trading Volume Declines 68%
In its operating data report for May, which was released on Monday, Robinhood revealed that its trading volume had greatly declined monthly and yearly. The trading app stated that its cryptocurrency trading volume reduced by 43% to $2.1 billion recorded for the month of May.
Robinhood’s year-over-year numbers were even more shocking, with its May 2023 figures of $2.1 billion signifying a 68% decline from its May 2022 figures of $6.6 billion, the firm’s largest decline recorded for the month of May.
Moreover, there was also a fall in the number of active users on the Robinhood platform. The company disclosed that its active user figures dropped from 11.5 million the previous month to 10.6 million, a 7.8% decrease.
Interestingly, the platform recorded a positive increase in its options contracts, which surged by 36% for the month. This increase shows a shift in investor sentiment and focus as there appears to be a move away from cryptocurrency towards other investment opportunities.
HOOD price holding steady above $9 | Source: Robinhood Markets, Inc On TradingView.com
Navigating Regulatory Pressures
Robinhood’s figures come at a time when cryptocurrency companies are being targeted by the United States Securities and Exchange Commission (SEC) among other agencies. Last week, the SEC sued Binance and Coinbase exchanges and declared a number of cryptocurrencies to be securities in the process.
As a response, Robinhood delisted three tokens, including Polygon (MATIC), Solana (SOL), and Cardano (ADA) that were named to be securities by the SEC. The platform made the decision because of regulatory action being taken against digital assets, which could involve these tokens very soon.
The Robinhood users were notified to withdraw their ADA, SOL, and MATIC assets by June 26, 2023, as they will no longer be supported by the platform. Furthermore, all trades for these tokens will be halted on June 27, 2023.
Despite Robinhood’s decline in trading volumes, its stock has fared relatively well in the last month, currently trading at $9.42 during this writing, only 5.4% lower than its May peak of $9.96.