According to the report, retail engagement saw significant acceleration in the first quarter, prompting KBW to commence coverage of Robinhood. The firm notes that Robinhood‘s share price surged notably as retail trading activity intensified.

The duration of this upsurge in retail trading remains uncertain, with KBW raising questions about its sustainability. The research report highlights the potential for continued strength in retail stocks and cryptocurrency prices, suggesting that the heightened engagement from retail investors may persist or even grow.

However, KBW analysts caution that the stock’s current price already reflects the anticipated benefits from new product launches and an increased level of normalized retail trading activity. They anticipate a moderation in retail activity from the levels observed in the first quarter, with a gradual decline expected into 2025.

Despite this, KBW underscores the rapid growth potential of the U.S. self-directed brokerage industry, positioning Robinhood as a burgeoning player in this expanding market. With Robinhood currently holding approximately 1% share of U.S. self-directed assets and about 20% share of estimated total U.S. self-direct brokerage accounts, there is room for the platform to surpass overall industry asset growth as its client base matures.

Robinhood’s shares closed at $19.20 on Tuesday, reflecting a year-to-date gain of over 50%.

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Last year, many crypto companies underwent staff reductions due to market downturns and bankruptcy proceedings. Adding to these actions taken to cope with challenging market conditions, the online brokerage firm Robinhood Markets announced its first round of layoffs in a while.

In an internal announcement, Robinhood revealed its decision to lay off approximately 150 full-time employees, constituting 7% of its total workforce.

In a company-wide message released by Chief Financial Officer Jason Warnick, it was stated that these cuts were made to “align with volumes and better align team structures.”

The company spokesperson did not confirm the layoffs explicitly but indicated that some changes might be necessary to “continually deliver operational excellence.” This recent layoff decision occurred within five days of Robinhood’s acquisition of credit card firm X1 for a deal worth $95 million.

Robinhood achieved its peak performance in the second quarter of 2021, with 21.3 million active users and revenue surpassing $565 million. However, recent reports indicate a 44% decrease in monthly active users and a 30% revenue decline compared to the previous year.

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This strategic expansion is laying the groundwork for the development of digital assets, in line with recent increases in crypto asset prices. Robinhood Markets Inc. is preparing to take a significant step by introducing commission-free trading in the European crypto market.

The platform will become operational on Thursday. Also, it will offer European investors the opportunity to trade seamlessly with more than 25 digital assets, including leading cryptocurrencies. This is considered a significant turning point for the rapidly growing digital asset landscape in the region.

In addition, in an exclusive interview with Johann Kerbrat, General Manager of Robinhood Crypto, it was revealed that the application will come with an innovative cash-back loyalty program that will credit a percentage of each user’s monthly trading volume as Bitcoin, with the aim of enhancing the user experience.

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According to a report based on an anonymous source, the crypto exchange founded in 2011 hoped to launch the service next year.

The report also highlighted that Kraken Securities, a new division, will manage the service, facilitating trading in both the USA and the UK.

The source stated that Kraken has the necessary authorization in the United Kingdom and has applied to the Financial Industry Regulatory Authority in the USA for a broker-dealer license.

This move, which will allow Kraken’s users to trade both traditional shares and crypto, will make a big noise in the recently well-known Robinhood exchange.

This feature, as is well known, also allowed the customers of FTX.US to trade shares a few months before it crashed.

A spokesperson for Kraken said about the report: “Although we cannot comment on rumors or speculations, we aim to expand and enhance our offering to ensure that our customers continue to have safe and uninterrupted access to the entire Kraken package.”

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FTX 2.0 Not Good

Last month, Kraken’s founding partner Powel drew a lot of attention with a statement.

Kraken’s founding partner questioned the applicability of Ftx 2.0. He also expresses his concerns about the recently bankrupted crypto exchange. In a tweet, Powell said “FTX 2.0 would have been worse than starting from scratch. No team, no technology, no license, no banking, tainted brand.”

“The trustee should auction off the domain name and trademark to the highest bidder. Anything beyond that is a fantasy attack to collect a fee for creditors.” he explained.

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