Robinhood on Wednesday detailed a set of product and market expansions, saying it will broaden its perpetual futures offering in Europe beyond cryptocurrencies and roll out crypto trading in the United Kingdom. The firm also introduced a lending product tied to its dollar-backed stablecoin and reiterated recent steps to enter new national markets.
Under the European expansion, eligible investors will gain access to perpetual futures - commonly called "perps" - that reference commodities, exchange-traded funds and foreign exchange instruments. The company specified examples including gold, silver, crude oil and the euro-dollar pair. These contracts will be offered with leverage up to 10 times and will be tradable around the clock, according to the company.
Perpetual futures are futures contracts that do not have a set expiration date. The product class has drawn notable attention in the United States since the Commodity Futures Trading Commission in May permitted trading of perpetual futures on domestic exchanges, the company noted.
Separately, Robinhood said it plans to enable crypto trading for users in the U.K., part of an effort to build a more comprehensive investing platform in the region.
On the stablecoin front, the firm launched Robinhood Earn, a lending product that allows eligible U.S. users to lend USDG through a self-custody wallet. The company described an estimated annualized return of 7% for participants. Robinhood also said Robinhood Earn carries insurance that covers certain losses arising from cyberattacks or smart-contract exploits; that coverage has been arranged through Lloyd's of London and RELM.
In addition to product launches, the company disclosed corporate expansion milestones: it announced entry into Canada following its acquisition of WonderFi and said it obtained a capital markets services licence in Singapore. The trading platform serves more than 28 million customers across 38 countries and has been diversifying into additional financial services in recent years to reduce its dependence on trading activity as a source of revenue.
The company also reported weaker-than-expected transaction revenue for the first quarter, attributing results in part to crypto-driven volatility.
Key points
- Robinhood expanded perpetual futures in Europe to include commodities, ETFs and FX pairs with up to 10x leverage and 24/7 trading - impacting derivatives and commodity markets.
- The platform plans to launch crypto trading in the U.K., advancing its goal of an all-in-one investing offering for that region - relevant to retail crypto markets and fintech services.
- Robinhood introduced Robinhood Earn for eligible U.S. users to lend USDG at an estimated 7% annualized return, with insurance for certain cyber and smart-contract losses arranged through Lloyd's of London and RELM.
Risks and uncertainties
- Transaction revenue was weaker than expected in the first quarter due to crypto-driven volatility, highlighting earnings sensitivity to crypto market swings and the potential impact on the company’s financials.
- The insurance for Robinhood Earn covers certain losses from cyberattacks or smart-contract exploits, indicating that some types of losses may remain uninsured.
- The lending product is available only to eligible U.S. users, which limits its immediate addressable customer base and may constrain near-term adoption.
The company continues to expand its service set and geographic footprint while managing revenue variability tied to crypto markets. Observers will likely watch adoption of the new perpetual futures products in Europe, uptake of U.K. crypto trading when launched, and performance of the USDG lending product in the United States.