Robinhood Markets is adding a feature to its cryptocurrency platform that could make it a bigger player in the crypto world—and force rivals to reduce fees. The broker announced on Wednesday that it would start testing a so-called crypto wallet next month. Shares of Robinhood were up more than 12% for the week as of Thursday, before sliding on China’s crypto crackdown.
Robinhood currently allows only users to buy and sell crypto assets. That makes the service more about price speculation than peer-to-peer transactions. Adding a wallet means that users can easily move assets on or off the app, or to one another.
The online broker is best known for stocks and options, but crypto is becoming a bigger deal. Digital assets made up more than half of its transaction revenue in the latest quarter, with Dogecoin alone accounting for 26% of total revenue. Robinhood’s crypto expansion may put fee pressure on players such as Coinbase Global and PayPal Holdings , just as Robinhood’s rise drove brokers to lower stock commissions to zero.
Just because Robinhood is commission-free doesn’t mean its service comes at no cost. Robinhood makes money from crypto just as it does with stocks and options: It sends trades to market makers that complete transactions, take a cut of the spread, and then send a rebate back to Robinhood. Just how big a spread is a mystery; unlike stocks and options, Robinhood doesn’t have to report on crypto payment for order flow, as it does with stocks. For now, much of crypto lives outside the purview of the Securities and Exchange Commission.
Next Week
Monday 9/27
TotalEnergies holds a two-day investor meeting to discuss its energy and strategic outlook. The company recently changed its name from Total to reflect a further push into clean energy and also set a goal of net-zero emissions by 2050.
The Census Bureau releases the durable goods report for August. New orders for manufactured durable goods are expected to rise 0.6% month over month to $258.7 billion, after a 0.1% decline in July. Excluding transportation, new orders are seen gaining 0.5%, less than the previous 0.8% rate.
Tuesday 9/28
IHS Markit and Micron Technology report quarterly results.
Treasury Secretary Janet Yellen deliver the keynote address at the 63rd National Association for Business Economics annual meeting. The theme of this year’s confab, which runs from Sept. 26 to Sept. 28, is “Shocks, Shifts, and the Emerging Economic Landscape.”
The Conference Board releases its Consumer Confidence Index for September. Consensus estimate is for a 114.5 reading, roughly even with the August figure.
S&P CoreLogic releases the Case-Shiller National Home Price Index for July. Economists forecast a 20% year-over-year jump, which would be the fourth consecutive monthly record increase for the index.
Wednesday 9/29
Cintas releases first-quarter fiscal-2022 results.
Generac Holdings hosts its 2021 investor day virtually. CEO Aaron Jagdfeld is among the management-team members who will discuss growth opportunities for the company.
The National Association of Realtors releases its Pending Home Sales Index for August. Expectations are for a 1% month-over-month rise, after a 1.8% dip in July.
Thursday 9/30
CarMax , Jefferies Financial Group , McCormick, and Paychex report earnings.
Intuit hosts its 2021 investor day virtually.
Novartis holds an investor event to discuss its ESG initiatives.
The Institute for Supply Management releases its Chicago Purchasing Manager’s Index for September. Economists forecast a 64.7 reading, about two points less than the August data.
Friday 10/1
The Bureau of Economic Analysis reports personal income and spending for August. Income is expected to rise 0.3% month over month, while spending is seen increasing 0.7%. This compares with gains of 1.1% and 0.3%, respectively, in July.
The Census Bureau reports construction spending data for August. Consensus estimate is for construction spending to rise 0.4% month over month to a seasonally adjusted annual rate of $1.58 trillion.
Write to Avi Salzman at [email protected]
