3 Reasons Coinbase Will Hold Up Better Than Robinhood

Robinhood Markets (NASDAQ: HOOD) disappointed investors with its financial update this week. It fell short of analyst expectations for the quarter, and its near-term guidance wasn't very encouraging. The market responded the way you would expect, sending Robinhood stock 10% lower on Wednesday. Is that a bad omen for Coinbase Global (NASDAQ: COIN) when it reports financial results for the same three-month period in two weeks?

Not so fast. Robinhood and Coinbase went public three months apart earlier this year, and they seem to be joined at the hip as next-gen trading platforms for young trigger-happy speculators. However, Robinhood operates as a marketplace for stocks, options, and cryptocurrency. Coinbase is laser-focused as the world's largest cryptocurrency exchange platform. Robinhood is a jack of all trades; Coinbase is a master of one.

This in and of itself doesn't mean that Coinbase is immune to what ails Robinhood this week. If we only look at Robinhood's crypto business, we see a problematic sequential drop in this week's report. The $51 million in revenue that Robinhood generated from cryptocurrency trading was 860% ahead of where it was a year earlier, but it was a brutal 78% quarter-over-quarter plunge from the $233 million it delivered in the second quarter of this year. With Coinbase reporting on Nov. 9, it's natural to be concerned. Let's go over some of the reasons why the top dog in crypto should hold up considerably better than Robinhood did this week.

Source Fool.com