Robinhood reported a sharp surge in crypto-related revenue for the second quarter. The companys earnings from digital assets rose by 98% year-on-year to $160 million.

Overall, the company saw a 45% increase in net revenue to $989 million and a 105% jump in net income to $386 million.

Robinhood Bets Big on Tokenization

Trading volumes in crypto reached $28 billion, up 32% from the previous quarter, supported by a broader market cap increase of 21.7% to $3.36 trillion.

Despite exceeding analyst expectations, Robinhood shares dipped slightly in after-hours trading. A central theme of the companys earnings call was CEO Vlad Tenevs strong focus on tokenization, which he described as the most significant innovation in capital markets in over a decade. Tenev referenced tokenization 11 times during the earnings call and emphasized its role in Robinhoods long-term strategy.

The company plans to tokenize traditionally illiquid or inaccessible real-world assets, such as private shares, venture capital funds, and real estate, through its new Ethereum-based Layer 2 network, called Robinhood Chain. This initiative has already seen a European roll-out of digital assets, which offers exposure to companies like SpaceX and OpenAI.

Tenev said tokenization would allow instant settlement, 24/7 trading, and self-custody for retail users. The push comes on the heels of Robinhoods $200 million acquisition of crypto exchange Bitstamp, which is expected to support its tokenization ambitions.

Tokenization Back in Focus

With increased regulatory interest and the US Securities and Exchange Commission (SEC) indicating openness to tokenization frameworks, Robinhood is positioning itself as a frontrunner in a space that has regained momentum following earlier experiments by Binance and the now-defunct FTX.

Back in June, Gemini, founded by the Winklevoss twins, introduced tokenized trading services for its European clients, starting with shares of MicroStrategy. Its rival, Coinbase, is said to be in the process of securing approval from the SEC to roll out tokenized stock offerings.

Adding to the momentum, BlackRock CEO Larry Fink, whose firm oversees $12.5 trillion in assets, has also publicly encouraged the securities regulator to greenlight tokenization of both stocks and bonds.