Robinhood Markets Inc.’s turnaround efforts are likely to grate up against the implosion of crypto exchange FTX and the broader cryptocurrency market, an analyst said late Monday, shortly before the U.S. charged FTX founder Sam Bankman-Fried with multiple counts of fraud.
Allen said that following last year’s meme-stocks frenzy, trading activity on Robinhood has cooled. He said “a sustained move higher in equity markets” — something that is far from guaranteed next year — would be needed to spur stronger trading activity. Allen said the scrutiny of FTX also removed it as a potential buyer of Robinhood. And the fallout raised the possibility of lower trading revenues for Robinhood’s crypto segment, “given substantial price declines and material deterioration in investor confidence.”Bank of America, in a note last month, said that while Coinbase COIN, -7.96% was unlikely to be “another FTX,” it still faced “a number of new headwinds over the near/medium term due to the recent collapse of rival crypto exchange FTX.
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