The Federal Reserve hiked the interest rates by another 75 basis points on Wednesday. Assets across the financial spectrum—right from stocks to Bitcoin and gold—initially noted a couple of long green candles. However, the tides reversed quickly and the gains were mostly negated within minutes.
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In fact, over $860 billion being was out from the US stock market yesterday, with tech and consumer cyclical companies taking the hit.
FinServ company Robinhood’s shares were also 4.3% down a day back. In the after trading hours, however, it managed to glide up. After noting a close to 3% incline, HOOD was trading at $11.70.
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The company’s earnings report was out on Wednesday, and it reported a net loss of $175 million in the third quarter. The loss was, notably, smaller than expected and its margin trading business benefited from rising interest rates, while increased volatility in the markets helped keep its options and equity segments boat afloat.
Thus, the slight rise noted during the after trading hours hints that investors are perhaps focussed on the positive takeaways rather than the net-loss figure per se.
Robinhood and Crypto
The company has made significants advancements in the crypto space lately. During the earnings call conference, executives highlighted that crypto was be a “big part” of its goal of becoming a global company. They highlighted that they were “excited” to continue investing in the space.
Robinhood, as such, launched the Beta of its Polygon-based Robinhood Web3 Wallet to 10,000 customers towards the end of September. The company also integrated Circle’s nativ stablecoin right after. During the conference call, Robinhood’s CEO Vladimir Tenev said the firm was planning to offer the Robinhood Wallet to its global retail base in the months to come. He added,
“We’re planning to roll the Robinhood wallet out internationally. So we’re excited that this will be our first product available to people all over the world.”
With respect to Robinhood’s plans for non-fungible tokens [NFTs], the executive said they will likely integrate a feature to view and custody them.
“We have been hearing from some of our crypto enthusiasts that they want at the very least to be able to view their NFTs in wallet. I think trading NFTs in app is a little bit complicated with the recent Apple guidance. So we’re keeping an eye on that. But I think it’s highly likely that we’ll add the ability to view NFTs and for people to custody them.“
Taking it slow and steady
Robinhood has time and again been touted for helping foster meme trading, in both stocks and crypto, and as a result, skepticism still prevails. However, during the post-earnings call, Chief Financial Officer Jason Warnick said that he expected the Q4 net interest revenues to go up by roughly $25 million from Q3 .
Dogecoin founder Billy Markus opined that the markets were cyclical and just had two modes characterized by periods of “complete idiotic delusion” and “overreacting despair.” He said that the company’s revenue will go back up when the “delusion starts again.”
Having said that, it is important to note that Robinhood envisions to become “the safest, most trusted” crypto service provider. A host of coins were rolled out by the exchange in the third quarter, but it has been quite “selective” the listings. In fact, Robinhood will continue moving carefully and sticking to its “deliberate approach.” Tenev added,
“Sometimes, that means moving a little bit slower than a lot of these other crypto companies. But we want to be extremely deliberate and to help protect customers and their money.”