JPMorgan Chase: Robinhood crypto revenue is expected to decline in Q1 after hitting a record in late 2024

JP Morgan analyst Kenneth Worthington predicts that Robinhood (HOOD) 's record cryptocurrency trading revenue may not be sustainable in the fourth quarter of 2024, and the volume of digital assets in Quarter 1 in 2025 may decline. The trading platform will release its first-quarter results after hours on May 1, Eastern Time. The report shows that Robinhood's cryptocurrency trading revenue surged 700% in the fourth quarter of last year, driving a significant increase in overall trading revenue. However, due to the double-kill of stocks and bonds in the late first quarter and the correction of the cryptocurrency market, it is expected that the crypto trading volume in the quarter will fall from $71 billion in the fourth quarter to $52 billion. The size of assets under custody (AUC) is expected to decrease by 5% month-on-month to $183.30 billion, but it is still up 41% year-on-year.
Although retail buying was stimulated by US tariffs in early April, analysts believe it will be difficult to reverse the decline in the first quarter. Weak demand for margin and derivatives trading could further weigh on results. JPMorgan maintained its "neutral" rating and lowered its price target by $1 to $44, implying about 10% downside from the current $49 share price.