Goldman Sours on Crypto Markets, Downgrades Robinhood

Goldman Sachs said most digital asset companies will miss revenue estimates in posting their first quarter earnings and has downgraded Robinhood from neutral to sell, CoinDesk reported Friday (April 8).

Per the report, Wall Street expectations for the brokerage app company are still too high. According to Goldman’s analyst team, those estimates will have to come down.

Additionally, the analysts said profitability in 2023 would only be able to happen with the difficult combination of 10% or more organic revenue growth plus macro tailwinds, but engagement is struggling right now.

Goldman said most digital asset companies won’t reach their Q1 revenue estimates. However, they said Coinbase and Silvergate, along with Robinhood, would be the furthest below the analyst consensus.

The report said Coinbase is predicted to see A1 trading volumes of $302 billion, which is a decline from the $547 billion from Q4.

Meanwhile, Silvergate will likely have disappointing earnings, and in the wake of the addition of Meta’s Diem project, assets could weigh on the bottom line and book value in the near term. Goldman kept its buy rating on Silvergate’s shares.

PYMNTS recently wrote that Robinhood was exploring adding retirement accounts to its platform, according to evidence found within the beta version of the iPhone app.

See also: Robinhood Beta Suggests Retirement Accounts Are Coming to the App

This would help the brokerage app go against the usual money managers and stock trading platforms, adding support for traditional IRAs, Roth IRAs and pension accounts.

Code was found in the beta version of the app that added references to these things, and the news came from developer Steve Moser, who shared them with Bloomberg. The code appears to show that Robinhood would support rolling over IRAs and making contributions, along with working with inherited IRA accounts.

This would help the company compete more directly with traditional brokerages, as other money managers and brokerage platforms have offered those services for a while now.