Equities Up, Crypto Down: Robinhood’s May 2023 Trading Data and Upcoming Crypto Delisting

Robinhood Markets Inc., the popular trading platform known for democratizing investing, has released its operating data for May 2023, showing an increase in both equity and options trading but a decline in cryptocurrency trading.

In May, Robinhood’s Net Cumulative Funded Accounts (NCFA) reached 23.1 million, a growth of around 20,000 from the previous month. This figure, however, only represents unique users, as it does not count existing customers who have opened multiple accounts.

Despite the increase in the number of funded accounts, Robinhood reported a drop in Monthly Active Users (MAU), which fell by roughly 900,000 from April to May 2023, bringing the total to 10.6 million.

The trading platform experienced an uptick in Assets Under Custody (AUC), with a 6% increase from April to $81.8 billion by the end of May. Net deposits for the month of May totaled $1.6 billion, an annualized growth rate of 25% compared to April’s AUC. Over the past year, net deposits have reached $16.5 billion, reflecting an annual growth rate of 22% relative to May 2022 AUC.

However, when it comes to trading volumes, Robinhood’s report showed contrasting trends. While equity notional trading volumes rose 27% to $49.4 billion, and options contracts traded increased 29% to 97.5 million, cryptocurrency trading went down. Crypto notional trading volumes decreased significantly by 43% to $2.1 billion, reflecting a relative decline in the enthusiasm for cryptocurrency trading among Robinhood’s user base in May.

The company’s margin balances remained stable at $3.1 billion, showing no change from April 2023. Cash sweep balances, on the other hand, showed a marked increase, growing 16% from the end of April to $11.2 billion by the end of May.

The report provides insights into Robinhood’s performance in a volatile market environment, indicating the shifting preferences of its users. The contrasting trend in equities and options versus cryptocurrency trading may reflect changing investor sentiment in the evolving landscape of financial markets.

Adding to these dynamics that could significantly impact future trading volumes, Robinhood announced the delisting of cryptocurrencies Solana (SOL), Cardano (ADA), and Polygon (MATIC). This decision follows recent charges by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase, alleging that these platforms traded unregistered securities. Given these circumstances, a further decline in cryptocurrency trading activity on Robinhood can be expected.