Beautiful Virgin Islands

Thursday, Oct 30, 2025

Crypto-Friendly Robinhood May Have to Look For A New Main Revenue Stream

Crypto-Friendly Robinhood May Have to Look For A New Main Revenue Stream

According to SEC Chairman Gary Gensler, SEC could ban payment for order flow, which is the leading revenue stream for a popular trading app Robinhood.

Robinhood executives have promised to diversify its revenue sources in the coming months and expand its appeal to cryptocurrency users.

U.S. Securities and Exchange Commission Chairman Gary Gensler said in an interview with Barron’s that his agency is considering banning “payment for order flow” practice. Trading in HOOD shares subsequently dropped, as payment for order flow has traditionally been brought in a large chunk of their revenue.

Payment for order flow (PFOF) is the compensation and benefit a brokerage firm receives for directing orders to different parties for trade execution. The brokerage firm receives a small payment, usually fractions of a penny per share, as compensation for directing the order to a particular market maker.

In other words, when someone buys a stock on Robinhood, another company pays Robinhood fractions of a penny per share to match buyers and sellers. Using complex price data, these market makers can execute the trade more efficiently than Robinhood could and take a cut of the resultant proceeds.

This practice enables Robinhood to advertise commission-free trades. And it’s not necessarily a bad thing. The market makers provide liquidity that make reasonably priced trades possible. They can even improve the trading prices for Robinhood customers as they must be able to at least match, if not beat, orders placed directly on a U.S. stock exchange, in line with what’s called National Best Bid and Offer (NBBO).

Gensler has in the past been critical of the PFOF practice, whereby wholesale market makers pay broker-dealers to send them client orders that they execute on their own trading platform or a third-party platform. He has said the practice raises several conflict-of-interest questions.

According to some opinions, the data that market makers receive will reduce competition over time as the best firms price other market makers out, leading to larger spreads. Gensler agrees that it might be better if this data were all public.

“They get the data, they get the first look, they get to match off buyers and sellers out of that order flow. That may not be the most efficient markets for the 2020s.”

Robinhood CEO Vlad Tenev, in the company’s Q2 earnings announcement, remained committed to a number of new product additions, including a crypto wallet and more cryptocurrencies for trading. Its seven listed coins, including Dogecoin, are a primary source of non-PFOF revenue for the firm.

In the Q2 earnings call Robinhood revealed that 60% of accounts with funds in them had begun trading crypto for the first time, enough for crypto revenue to account for 41% of total revenue—up from 17% the previous quarter. Of that, however, 62% came solely from Dogecoin.

Source: Crypto-Friendly Robinhood May Have to Look For A New Main Revenue Stream – Fintechs.fi

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
UK and Vietnam Sign Landmark Migration Deal to Fast-Track Returns of Irregular Arrivals
UK Drug-Pricing Overhaul Essential for Life-Sciences Ambition, Says GSK Chief
Princesses Beatrice and Eugenie Temporarily Leave the UK Amid Their Parents’ Royal Fallout
UK Weighs Early End to Oil and Gas Windfall Tax as Reeves Seeks Investment Commitments
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
×