In brief
- Trading app Robinhood's SVP of finance and strategy Shiv Verma said that the company is "constantly" talking about buying Bitcoin with its spare cash.
- Over 200 publicly traded companies have adopted the digital asset treasury strategy.
- Some experts have warned it's risky; Verma said buying crypto for a company's balance sheet has "pros and cons."
Trading app Robinhood is weighing whether to put Bitcoin on its balance sheet, the company's Senior Vice President of Finance and Strategy Shiv Verma said.
Speaking Wednesday following its quarterly earnings call, Verma said that buying Bitcoin and other cryptocurrencies with spare cash has both "pros and cons" potentially aligning it with its crypto-buying customers but requiring capital that might be better served elsewhere.
"We've spent a lot of time thinking about [buying digital assets]," Verma said. "If you put it on your balance sheet, it has the positives of that you're aligned with the community, but it does take up capital."
He added: "Our shareholders can also go and buy Bitcoin directly on Robinhood and so are we making that decision for them? Is it the best use of our capital? We have this debate constantly—we're still thinking about it."
Verma's remarks came as the Menlo Park, California-based company beat analysts' estimates with $1.27 billion in revenues and earnings per share of $0.61.
Robinhood's crypto trading revenues jumped 339% year-over-year and CEO Vlad Tenev reiterated HOOD’s ambitious plans to expand into a more comprehensive financial services platform. The firm now allows trading Bitcoin, Ethereum, XRP, Solana, and more than a dozen other digital assets.
Nasdaq-listed HOOD closed down nearly 11% lower on Thursday afternoon in New York. Its shares have soared more than 240% year-to-date.
Bitcoin treasuries offer exposure to the asset for investors via their publicly traded shares. American software firm Strategy, formerly MicroStrategy, pioneered the strategy in 2020 and now holds 641,205 digital coins worth about $64.9 billion based on the current price. Now more
Now more than 200 other U.S. publicly-listed companies have created BTC treasuries along with other firms that have accumulated holdings of other major tokens, including Ethereum and Solana.
They include Japanese hotel operator, Metaplanet, which has built the fourth largest BTC stockpile with nearly 31,000 BTC worth over $3.1 billion based on current prices, Bitcoin miner BitMine Immersion, and online marketing firm SharpLink Gaming, which have both created Ethereum treasuries.
But experts have warned of the dangers of companies buying crypto and how it could be inherently risky. Now, the share prices of many of the firms that have bought digital assets have dropped as the prices of leading digital assets have slumped.
In the call Wednesday, Robinhood also highlighted the growth of its prediction markets business, which generated $100 million for the quarter, and which the company is seeking to grow, including overseas. The firm said that Verma, a seven-year veteran of the firm, would take over as CFO from Jason Warnick, who is retiring.
Bitcoin was recently trading at about 100,700, down about 3% over the past 24 hours. In a Myriad prediction market, about 54% of respondents expect Bitcoin's next move to $115,000. Myriad is a unit of Dastan, the parent company of Decrypt.