Why Robinhood CEO Vlad Tenev Is Betting Big on Crypto and Stablecoins

I think the first benefits of adopting crypto technology for more things, including real world assets, are going to be lowering the costs for the companies and improving the margins. But the kind of down the road impact will be passing that on to users with even more value and lower cost of investing. So the ultimate cost borne by users will decrease over time, which is going to make an impact long-term on their portfolio returns and their retirement savings. And I think Robinhood can really help accelerate that. Our approach has always been to not use technology to improve our margins, but really use technology to operate sustainably at lower margins than our peers and pass back that value to customers.

Good to see you, Laura. Thanks for having me.

Yeah, I think the crypto business has been firing on all cylinders, really. We have a great team, a great GM Johan who's been running it. And we've had some constraints over the past few years. You know, I wasn't shy about talking about how the current administration and the SEC has really tried to strangle crypto in the US. And we didn't let that — I think that was disappointing and we were unhappy with it — but we didn't let it keep our business stagnant. So we used that opportunity to launch in the EU, where we went live with crypto just about a year ago. We've been growing that business. We've been trying out things over there that perhaps have been a little bit more difficult here, like more tokens, more services like staking for our customers. And yeah, more recently we've been able to get a little bit more aggressive with the offerings. So we've listed more coins. Customers have asked for more selection from our crypto products — they want to be able to trade all the things that they can trade on other platforms on Robinhood as well. And I think that's all coalesced together to lead to a really strong November. We announced some November metrics for the crypto business — volumes were up over 500% from October, and October was actually a very strong month as well. So I think on the retail side, Robinhood has basically been gaining market share using the value props of really strong pricing and the fact that all of your investments and financial needs can be met in one place. And we've been seeing really, really good market share gains because of that. And now we're kind of looking ahead to 2025. We made an arrangement to acquire Bitstamp, which is one of the longest continually running crypto exchanges. So I think for us, getting deeper into the space vertically, integrating, providing more options for customers is the main priority going into next year.

Yeah, it was interesting. I think juxtaposing this election night, which was a very busy night for Robinhood — I mean, we had multiple teams that were monitoring heavy usage across multiple products. We had crypto, which obviously reacted to the news of Trump being more likely to win the election quite early, the equities markets, which we now offered 24-hour trading in over a thousand US equities — they were responding as well. Then we also had a product called Presidential Election Market, which allowed customers to trade event contracts on the election, and that was just having very, very high volume as well — really an insane volume. We did over half a billion contracts in that, even though we launched a week before the election. So juxtaposing that to maybe around the first time you and I met, the 2016 election, where Robinhood users and Robinhood itself felt very much like a spectator in the election — I mean, markets closed at 1 p.m. Pacific in the afternoon, then the election happened, and customers could queue their orders for the next morning, but they really couldn't trade through the night as some of the institutions could. So yeah, it was heavy volume and a lot of trading across multiple product lines.

Yeah, we didn't see any noticeable cannibalization. And I think part of that is because spot was available on Robinhood — it didn't lead to much of a behavior change for us as a retail-focused platform. So people have just been used to being able to access these products in the spot form for many, many years now, and it wasn't much of a new thing. Of course, it opened up the possibility to hold it in retirement accounts, and that's strictly accretive to the business. But yeah, in terms of massive movements away from trading spot to ETFs, we didn't see anything like that. And now a couple weeks ago we had the launch of options on the Bitcoin ETFs, which is also interesting. So that one we're kind of keenly watching, because that allows some customers to take different types of positions — you can take long positions as well as short positions — and it opens up a new type of active trading behavior that was difficult before.

Yeah, so one of the things that Bitcoin ETFs opened up on Robinhood is investing in Bitcoin in retirement accounts. And I think for some customers, they view Bitcoin and Ether as a long-term investment — they wanted part of their retirement portfolio. It is still the most commonly used recurring investment on the platform, so folks are dollar-cost averaging into Bitcoin as they do with other instruments. And I think that was really the big unlock. Since Robinhood allows you to not just have a trading account but you can have a retirement account as well, it opened up this new asset class to a whole group of buy-and-hold, long-term investors that are using our products to save for retirement. And retirement's done quite well also — it crossed $10 billion in assets. It's close to a 10x increase in total assets under custody from a year ago. So that product has just resonated very strongly with our customers. And I think it's still — having access to crypto in your retirement account is a new thing that not every service offers.

Yeah, I think broadly there's three different types of customers involved here. One is active traders. And one of our priorities as a company is to become the best active trader platform — so build a platform that you can measure by market share and becomes clearly for customers the best place to trade any asset that we offer, whether it's crypto, equities, or options. So that's kind of one category of work that we're doing. And in fact, we had a conference in Miami in October, just a couple weeks ago, where we announced a slew of active trading products including Robinhood Legend. Robinhood Legend is the first platform that we built purposely for the active trader in mind. And one of the things that we've been hearing is our customers want crypto functionality with Robinhood Legend. So the team was hard at work at that — originally that was slated for 2025, but it's actually rolling out imminently. Like over the next couple of days, it'll start rolling out to users. And that comes with a new feature that we're going to be offering for the first time on the crypto side, which is direct exchange routing on Robinhood. So rather than going through market makers and liquidity providers, you'll be able to access the order books directly and go directly into exchange, which I think for active traders is very, very important because they want that type of precise control over their orders and their pricing — they want to see the order go into the order book. And it's something we've been hearing a lot about. So that's the active trader side. For new investors into crypto, Robinhood has been very, very successful because we established such a large customer base with traditional stocks. So when customers became curious about crypto — maybe they hear about it in the news or a friend tells them — and they already have a Robinhood account where they have their other investments, we just became a great point to introduce new people to this asset class. I think you mentioned memes — it's funny to see how Doge has like entered the public consciousness. Right, it started out as very much a meme, the original one to some degree, and now it's the namesake of like government efficiency. Right, now there's a quasi-government agency that's named after this thing. And I think a big part of why it entered the public popular consciousness was that it was available on Robinhood early — a lot of people got in at very low prices, and so when 2021 came and you saw huge appreciation in that coin, a lot of Robinhood users ultimately benefited from that exposure. And we had millions and millions of customers that discovered crypto through memes and through other things on the platform. And then there's probably a third category which I would call more institutional — folks that are looking to diversify, they're looking to build a long-term portfolio, and they see crypto as an uncorrelated hedge against other types of risks that maybe their equities portfolio does not adequately hedge. So they might be holding some in dollars, some in commodities like gold, they'll have an equities portfolio, and then Bitcoin as an asset class along with other cryptos sort of rounds that out. And we serve all three. I think Robinhood is actually — the goal for the company is for a retail customer, we should be able to meet all of your financial needs and serve the entirety of your wallet. Your entire wallet should be at Robinhood, and you should get the best experience and the best pricing from all the services that you need.

Yeah, it's an odd situation to be in where there's more regulatory clarity and more flexibility in the EU than in the US for something, isn't it? Hopefully that'll change. But yeah, the EU has gotten aggressive and has made attempts to actually embrace the industry. There is more clarity with MiCA and the upcoming regulations. And so we've been able to offer greater selection of assets, the ability to stake ETH and SOL, and these things are very popular with our customers because it's an easy way to generate yield while you're securing the different crypto networks. For customers, we share a large portion of the economics directly with them, so it's easy and you get a great deal, which I think is the reason why it's been so popular.

I think it's more of an engineering thing. It's a little bit easier to get started with SOL staking as a service because you don't have to worry about the minimums to run a validator like you do on the ETH side. But yeah, it's more implementation complexity rather than any sort of regulatory difference.

Yeah, that sounds about right. It's — I mean, for customers it resonates. If it's easy to enable and you get a yield, then there's a strong incentive to stake your assets. And it's good because for folks that are crypto native, they like to participate in the network. They really feel like it's not just an asset they're holding, but they're helping build a community around these assets.

Yeah, I think a lot of our customers tend to be first-timers. I assume that's the case for the wallet as well. We do very little cross-marketing between the main Robinhood app and the wallet app, and instead the goal with every product is to have it be independently successful. So we want to make sure that people come to the wallet because it's a great wallet, not just because it's associated with Robinhood. And that led us to a bunch of innovations in the wallet space, like gasless swaps, where yeah, you don't have to be holding the gas token and the transaction itself is a little bit simpler. We have great cross-chain swapping functionality available as well, and we're really trying to abstract the complexity of being on-chain from customers as much as possible while giving them the benefit. So we want to give you the same clean user experience that you're accustomed to with the Robinhood app, but with all the power of being able to operate on-chain and access dApps and swap your cryptos. So the wallet's an area where we see a lot of opportunity. And I think that if we keep working on the wallet and we keep making progress on the back end and hopefully pushing ahead tokenization of real-world assets, the wallet becomes an even more important part of the strategy.

We have a couple of different partners. Arbitrum, of course, one of them on the chain side. But yeah, we partner with various aggregators and other counterparties that help us facilitate the swapping as well.