Trading platform Robinhood Markets is still undecided about whether to buy and hold crypto, as many treasury firms have this year, even though doing so could make it more aligned with the crypto community, according to an executive.
“We spent a lot of time thinking about this,” Robinhood’s finance and strategy vice president Shiv Verma said in response to a question on whether the company would buy and hold crypto during its third-quarter earnings conference on Wednesday.
“We like alignment with the community. We are a big player in crypto. We want to keep doing it. We like that our customers are engaged in it,” he added.
“What we always try to figure out is: Is it the right thing for shareholders as well?”
The Trend of Crypto Treasury Holdings
Crypto treasury companies that buy and hold tokens have been one of the hottest trends on Wall Street this year, garnering billions of dollars in investments and boosting the share prices of most companies that adopt this model.
Some analysts, however, have warned that the sector could struggle with the influx of similar companies entering the market, and that crypto treasury companies may need to take bigger risks or start acquiring one another to remain afloat.
Considerations for Robinhood's Balance Sheet
Verma said if Robinhood were to put Bitcoin (BTC) or another cryptocurrency on its balance sheet, “it has the positives that you’re aligned with the community, but it does take up capital.”
“Is it the best use of our capital?” Verma questioned. “There’s a lot of different things you’re doing, from new products, for growth, [and] investing in engineering.”
“Our shareholders can also go and buy Bitcoin directly on Robinhood. So are we making that decision for them?” he added.
“We have this debate constantly, and I think the short answer is we’re still thinking about it.”
“There’s pros and cons to both of it,” he added. “It’s one that we’re going to keep actively looking at.”
Robinhood's Third-Quarter Financial Performance
Robinhood’s third-quarter earnings beat expectations, with revenues doubling from last year to $1.27 billion, driven by a more than 300% increase in its crypto revenues, which reached $268 million.