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Robinhood CEO Vlad Tenev Describes Crypto as Next Transition for Financial Services: “Clear Technological Advantage”
As investment broker Robinhood finds its footing as a publicly traded company, its CEO is still trying to figure out how to balance the platform’s roots in day trading with its desire to build a sustainable business.
Speaking at Fortune’s Brainstorm Tech conference on Monday, Vladimir Tenev reflected on his eventful tenure at the helm of the 10-year-old company, from startup darling to corporate villain. GameStop Meme stock debacle of 2021. After market turmoil sent Robinhood’s shares plummeting shortly after its IPO, Tenev said the platform is finally hitting its stride. That can be attributed in part to the company’s investment in one of the most volatile assets: crypto.
Robinhood has allowed its customers to trade cryptocurrencies since 2018, but it has made strides in the space over the past two years, including launching cryptocurrency trading in Europe and acquiring longtime exchange Bitstamp for $200 million in June. Tenev said he sees clear upside in doubling down on the space, which he described as much more than just memes and speculation.
“The cost of running a cryptocurrency business is an order of magnitude lower,” he told Fortune editor Alyson Shontell, citing the ability to leverage open-source infrastructure like blockchains. “There’s just a clear technological advantage.”
Robinhood isn’t the only financial company pushing deeper into crypto-related businesses, with legacy companies Black rock has Goldman Sachs Tenev was optimistic about the field, predicting that it would represent the “next transition” for financial services, thanks to the ability to remove costly intermediaries such as for settlement of transactions. “You don’t have to squint to imagine a world where stocks are on blockchains,” he said.
Time for reflection
While Robinhood has stabilized as a leading investment platform for young traders, its future looked shaky in 2021, when the company found itself at the center of the meme-stock craze. After fueling its rise with risky offerings like options, Robinhood had to restrict customer trading during a brief period of market volatility in January 2021 due to a lack of capital. And as public markets froze in 2022 and interest rates rose, Robinhood’s stock fell as much as 90% as it lost its core customer base.
Tenev said the company and its stock were able to recover somewhat by revisiting its core offerings, including the idea that all investors should be treated equally. One change was to offer quality service to its power users, upending Robinhood’s core thesis about customer equality.
The platform has also shifted from a focus on active trading to diversifying into other products, including retirement accounts, a credit cardand high-yield cash accounts. Still, Tenev said he still wants Robinhood to be able to compete with other brokerages, and even banks, for all types of customers, including high-net-worth individuals. “The aspiration is for people like me to have all of their wealth in Robinhood,” he said.
Tenev’s journey over the past two years has also been personal, including contemplating what would happen if the board decided to replace him as CEO. Still, he acknowledged that his immigrant background — he was born in Bulgaria — and his personality have helped him navigate the difficult times. “I have a pathological stability,” he said. “That can be very off-putting to people.”
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