Coinbase vs Robinhood: Overview of 2024's financial results and future prospects

Original title: "Coinbase + Robinhood: Financial Performance Overview"

Author:insights4vc , substack

Translated by: Shan Oppa, Golden Finance

Coinbase reported strong financial results for 2024, with full-year revenue of US$6.6 billion (111% year-on-year) and net revenue of US$2.6 billion. The company also announced $3.3 billion of adjusted EBITDA, which showed solid profitability despite the volatile cryptocurrency market.

Revenue in the fourth quarter reached USD 2.3 billion, up 88% month-on-month, mainly due to increased transaction volume and strong participation in subscription and service revenue.

Financial performance is mainly due to the following factors:

• Transaction revenue increased by 172% month-on-month to $1.6 billion in the fourth quarter.
• Subscription and service revenue increased by 15% month-on-month to $641 million.
• By the end of 2024, crypto asset prices will rise, especially Bitcoin and Ethereum.
• Strategic expansion, institutional adoption and regulatory clarity in derivatives trading in the United States

Coinbase also strengthened its balance sheet, with USD assets reaching USD 9.3 billion at the end of the fourth quarter, up USD 1.1 billion from the previous quarter. A large portion of its profits comes from unrealized gains from cryptocurrency investments ($687 million for the full year), highlighting the market volatility faced by Coinbase.

Coinbase Core Team:

• Co-founder and CEO: Brian Armstrong
• Co-founder and Board Director: Fred Ehrsam
• President and Chief Operating Officer: Emilie Choi
• Chief Financial Officer: Alesia Haas
• Chief Personnel Officer: LJ Brock
• Chief Legal Officer: Paul Grewal

Regulatory environment

The U.S. regulatory environment is changing, with the Trump administration prioritizing cryptocurrency leadership and abandoning restrictive “law enforcement supervision” policies. This opens the door to stablecoin and market structure legislation, improves the operating environment of centralized exchanges (CEXs), and reduces uncertainty about institutional compliance.

Coinbase has also received important international approvals, including VASP registration in the UK and Argentina, as well as progress in obtaining a MiCA license in the EU, thus enabling European expansion. Additionally, Coinbase won an intermediary appeal in its lawsuit with the SEC, a key step in shaping U.S. cryptocurrency regulation.

Growth Strategy

Coinbase aims to increase trading volume and expand market share, especially in the following aspects:

• Institutional transactions, up 139% year-on-year in 2024.
• Derivatives Market, Coinbase adds 92 new assets to its international exchanges.
• Subscription-based services such as Coinbase One had more than 600,000 users in the fourth quarter.
• Stablecoin adoption, USDC remains the focus, facilitating over $12 billion in on-chain USDC payments in 2024.

Market Reliance and Competition: As the top three cryptocurrency exchanges, Coinbase’s revenue is highly dependent on market sentiment, and the increasingly fierce competition for DEX forces CEXs to innovate.

Regulatory uncertainty: Despite progress in U.S. regulation, Coinbase still faces global risks, especially in Asia and Europe where policies remain unpredictable.

Institutional adoption and cryptocurrency ETFs

Coinbase is successfully building an institutional flywheel that benefits from:

• ETFs drive record inflows, driving Coinbase’s assets custodial from ETFs (AUC) to $93.2 billion.
• 7% of RIA currently invests in cryptocurrency ETFs, up 41% since the first quarter of 2024.
• Derivative trading volumes continue to grow, especially perpetual contracts and structured products.

This momentum shows stronger demand for institutional-level crypto products, which may further drive derivative adoption and major brokerage services.

The role of Base and on-chain extensions

Base, Coinbase’s layer 2 scaling solution, continues to have outstanding success:

• Base assets soared 89% in the fourth quarter to $14 billion.
• The stablecoin trading volume exceeded US$25 billion.
• More and more developers are building on Base to strengthen their role as the basic layer of on-chain finance.

Coinbase’s BTC-secured loan program is another major innovation that allows users to borrow USDC on their BTC holdings without having to sell their assets. This could create a new DeFi native lending model that integrates directly with the Coinbase ecosystem.

Coinbase (COIN) and Robinhood (HOOD)

Coinbase has consolidated its position as a leading regulated exchange by continuing to invest in infrastructure, compliance and global expansion, thus addressing cryptocurrency bear markets and regulatory challenges. Robinhood balanced its role as a brokerage firm and took a more cautious approach—focusing on cost-effectiveness, achieving profitability, and removing certain assets such as Solana and Polygon to address regulatory issues.

Despite these different strategies, Robinhood strengthened its position in cryptocurrency trading. Robinhood took a good position when the 2024 U.S. presidential election rekindled retail trading interest. In the fourth quarter of 2024 alone, its clients traded $71 billion in cryptocurrency, almost equivalent to the total trading volume in the first three quarters. Unlike Coinbase, Robinhood leverages its mature brokerage client base to integrate cryptocurrencies into its wider trading ecosystem.

Trading volume

In 2024, Robinhood's cryptocurrency trading volume surged to $143 billion (259% year-on-year), while Coinbase's retail trading volume was $221 billion (195% year-on-year). Historically, Robinhood’s trading volume occasionally surpassed Coinbase, such as in the second quarter of 2021, when its activity was driven by the surge in DOGE transactions. At the time, Robinhood supported only seven cryptocurrencies, but DOGE transactions accounted for 62% of its cryptocurrency revenue. A key difference in Robinhood is its ability to cross-sell cryptocurrency transactions to its brokerage clients, with nearly half (12 million out of 25 million) participating in the cryptocurrency market.

Income comparison

While Robinhood's cryptocurrency trading volume has increased, its crypto-related revenue reached US$626 million (363% year-on-year), significantly lower than Coinbase's US$3.43 billion (157% year-on-year).

This difference is mainly due to the lower charge rate – Robinhood’s charge rate was 0.50% in the fourth quarter of 2024, up from 0.23% in the first quarter of 2022, while Coinbase’s charge structure is higher. Robinhood has room to adjust its pricing model without compromising its competitive advantage in affordability.

Bitstamp Acquisition

Robinhood plans to acquire Bitstamp, which is expected to be completed in the first half of 2025, representing Robinhood’s strategic expansion into international and institutional markets. The combined transaction volume of the two in 2024 (US$252 billion) is very close to Coinbase's retail transaction volume. Bitstamp's presence in institutional trading provides Robinhood with a new growth pathway, complementing its existing retail-centric approach. However, Coinbase remains the dominant platform for institutions, with institutional transaction volumes of US$941 billion in 2024 (a year-on-year increase of 140%).

Robinhood’s acquisition shows that the company is working to transform from a U.S.-centric retail broker to a more diverse global cryptocurrency exchange. The success of this expansion will depend on regulatory conditions and Robinhood’s ability to effectively integrate Bitstamp’s business.

Institutional transactions remain a strength area for Coinbase, despite its operating commission rate being lower than retail, with institutional revenue of $346 million in 2024. Institutions prioritize liquidity, regulatory compliance and market depth, and Coinbase has advantages in these areas. While Bitstamp strengthens Robinhood’s institutional positioning, it takes time for Robinhood to gain meaningful market share in this area.

Blockchain strategy: Base and Robinhood approach

Coinbase has been investing in blockchain infrastructure through Base, which launched in the third quarter of 2023. Although Base currently contributes only a small portion of its revenue, Coinbase sees it as a long-term driver of profitability and a pathway to deep integration with decentralized finance (DeFi). Robinhood has not yet launched a blockchain initiative, which may limit its competitiveness in emerging DeFi and on-chain finance.

Beyond Transactions: Subscriptions and Services as Growth Drivers

Coinbase has successfully diversified revenue sources beyond transactions. Its “Subscription and Services” division expanded from $45 million in 2020 to $2.31 billion in 2024, including pledges, stablecoin revenue (USDC), custody and interest income. Pledge alone generated $706 million in revenue in 2024. Robinhood, while providing pledge services in the EU, faces U.S. regulatory restrictions that limit its ability to expand this source of income. The acquisition of Bitstamp may provide additional international market opportunities in the field, but regulatory considerations remain a key factor.

Stablecoin: Robinhood enters digital dollar market

Coinbase’s partnership with Circle brought in $910 million in stablecoin-related revenue in 2024. By contrast, Robinhood has partnered with Galaxy Digital, Kraken, Nuvei and Paxos to launch USDG under the global dollar network. The revenue sharing structure of USDG is not yet clear, but it shows Robinhood’s ambition to gain a foothold in the stablecoin space. If successful, stablecoins can be an additional source of income for Robinhood.

Tokenized securities

Both companies are exploring opportunities to tokenize real-world assets. Robinhood’s background in traditional finance and brokerage gives it a potential advantage in this area, and Coinbase’s expertise in crypto infrastructure can enable it to enter the market through blockchain native ways. While Coinbase has shown limited interest in traditional brokerage, its expansion to tokenized securities may change that position. The regulatory environment will play a key role in shaping the trajectory of this market.

Coinbase: First quarter 2025 Outlook

Coinbase provides guidance for the first quarter of 2025, and expects:

• As of February 11, 2025, transaction revenue will reach approximately US$750 million.
• Subscription and service revenue is expected to be between $685 million and $765 million.
• Transaction fees are higher, estimated to account for 15% to 20% of net income.
• Technology and development and general and administrative expenses ranged from US$750 million to US$800 million, reflecting the increase in market activity and wage expenditures.
• Sales and marketing expenses are expected to range between $235 million and $375 million, affected by performance marketing plans and USDC reward expansion.

These forecasts highlight Coinbase’s confidence in its continued strong market performance, while also reflecting its increased spending potential to capture further growth in the institutional and retail sectors.

Coinbase’s three main goals for 2025 include:

• Increase revenue: Increase trading market share, increase USDC market capitalization, and increase subscription and service revenue.
• Extended cryptocurrency utility: Increase stablecoin adoption and extend on-chain products such as Base, SmartWallet and Coinbase developer platforms.
• Extended Foundation: Strengthen regulatory participation and ensure that Coinbase remains the most trusted and scalable crypto platform.

Robinhood: 2025 Outlook

Encryption and institutional expansion

In the fourth quarter of 2024, Robinhood's cryptocurrency transaction volume increased by 400% year-on-year to $71 billion and plans to acquire Bitstamp in the first half of 2025 to attract institutional capital inflows. Although global regulatory risks remain, Ethereum's staking in the EU and new listing in the U.S. consolidates its position.

Active trading and derivatives growth

Robinhood is expanding into advanced trading through index options, futures and Robinhood Legend, competing with Interactive Brokers and Fidelity. With 477 million option contract trading volumes in the fourth quarter (up 61% year-on-year), it dominated the retail derivatives sector, but engagement and risk management are key challenges.

Global expansion and monetization

The company is developing in the Asia-Pacific region, with Singapore as its regional headquarters and expanding its UK operations through options trading. Robinhood Gold currently has 2.6 million users (penetration rate is 10%), while its credit card business has more than 100,000 cardholders, which requires improved execution efficiency in situations of complex supervision.

Investment Consulting and Wealth Management

The acquisition of TradePMR (first half of 2025) marks Robinhood’s entry into investment consulting and RIA services, targeting high-net-worth clients. Retirement AUC soared 600% year-on-year to $13.1 billion, positioning Robinhood as a multi-asset wealth platform, although retention and cross-selling remain major risks.

Financial prospects and risks

Robinhood expects adjusted spending to range from $2 billion to $2.1 billion, excluding credit losses, regulatory costs and acquisitions. Strong growth in stocks (154% year-on-year), margin loans (126% year-on-year) and cash flow (59% year-on-year) highlights financial strength, but market cyclical and execution risks remain.