The month-over-month drop to $14.4 billion outpaced declines in equities and options trading, which each fell 1%. Even so, the figure was more than double the year-earlier level
The downturn in cryptocurrency trading volumes on Robinhood (NASDAQ:HOOD) resulted in a substantial 29% decline in February, continuing the trend of retail-trader led reductions that began last year. This could have implications for other platforms such as Coinbase (NASDAQ:COIN).
According to data released on Wednesday, crypto trading on the app fell to $14.4 billion last month from $20.2 billion in January. This contrasts with a 1% drop in equities and options trading. Despite the decrease, the figure is still over double the $6.9 billion reported a year ago.
The decline in trading was expected as the cryptocurrency market experienced a downturn. Bitcoin (BTC) lost approximately 15% of its value last month, while the broader CoinDesk 20 Index (CD20) decreased by about 23%. Data from CoinDesk indicates that across centralized cryptocurrency exchanges, spot trading decreased by 19% to $2.3 trillion in February compared to January.
Memecoin activity also slowed down, with leading token launchpad Pump.fun seeing daily token launches plummet to 24,000 from 62,000, according to 10x Research.
This slowdown in cryptocurrency trading suggests reduced retail interest in the space, which could have implications for other exchanges like Coinbase that cater to a similar audience.
Shares of retail-focused trading platform Robinhood, which also offers equities, have declined by 4% this year. In comparison, Coinbase shares have dropped by 15%, aligning with the broader crypto market downturn.
However, Coinbase has been expanding its institutional services and blockchain infrastructure business, which could help mitigate the impact of weaker retail trading. The company recently announced the introduction of 24/7 bitcoin and ether futures trading.
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