How Many People Use Robinhood in 2024? A Deep Dive into User Stats

Hey there! If you‘ve landed on this page, you‘re likely interested in learning more about Robinhood and how many users the investing app actually has.

As someone who has used Robinhood myself and researched extensively into their platform, I‘m going to walk you through all the key statistics, data points, and insights you need to know.

By the end of this deep dive, you‘ll have a full picture of Robinhood‘s user base, growth trends, financials, products, controversies, and more. I‘ll also compare Robinhood against its biggest competitors to give context on its market position.

Let‘s get started!

Key Robinhood Usage Statistics 2024

First, here are some of the most important Robinhood usage stats to know:

• 31+ million verified users
• User growth rate of 95% from 2020 to 2021
• Over 50% of users are first-time investors
• Users trade around $460 billion in assets
• 62% of crypto revenue from Dogecoin in Q2 2021
• Average user age of 31 years old

Robinhood has seen tremendous growth since launching in 2013, with its user base more than doubling between 2020 and 2021.

Fueled by the meme stock and crypto boom, Robinhood attracted millions of young first-time investors looking to trade stocks, options, and cryptocurrencies commission-free.

The app‘s slick design and gamified experience resonate strongly with millennials and Gen Z. Robinhood makes investing feel like a social media platform.

Next, let‘s dig deeper into the user numbers over time…

How Many People Use Robinhood? User Growth Timeline

Robinhood reached the 1 million user milestone in 2016, just one year after launching options trading. By 2017, usage had doubled to 2 million users.

Here‘s a timeline of Robinhood‘s user growth since launch:

• 2015 (launch) – 500,000 users
• 2016 – 1 million users
• 2017 – 2 million users
• 2018 – 4 million users
• 2019 – 10 million users
• 2020 – 13 million users
• 2021 – 31 million users
• 2022 – Over 31 million users

A few key events propelled Robinhood‘s user count higher:

• March 2016: Launched options trading
• February 2018: Introduced cryptocurrency trading
• October 2018: Launched Robinhood Gold premium service
• September 2019: Introduced fractional share trading
• March 2020: Launched no-fee checking/cash management accounts

Robinhood‘s user growth started accelerating rapidly in 2020 and 2021. The trading mania around meme stocks like GameStop and AMC helped attract millions of new users.

Cryptocurrency trading also became immensely popular, with Dogecoin making up a significant portion of activity. Robinhood‘s crypto transaction revenue rose over 500% year-over-year in Q2 2021.

As of 2022, Robinhood user growth has stabilized around the 31+ million mark. But product expansions into retirement accounts, consumer lending, and international markets could re-accelerate growth.

How Many Robinhood Accounts Are Active?

Not all 31+ million Robinhood users are actively trading on the platform.

Robinhood reported having 21.3 million monthly active users (MAUs) as of Q2 2022. This refers to users who logged into their account and made at least one trade in the past month.

The number of funded accounts also gives a sense of active usage. An account is considered funded when a user deposits money to make trades and investments.

Here is Robinhood‘s funded accounts growth:

• Q4 2019 – 7.2 million
• Q4 2020 – 12.5 million
• Q4 2021 – 22.7 million

So around 73% of Robinhood users are "funded accounts", meaning they‘ve added money to invest and actively use their account. The remaining 27% are inactive accounts that have not been funded.

Robinhood User Demographics

Who exactly is using Robinhood? Here‘s a demographic profile of the average user:

• Age: 31 years old
• Gender: Over 70% male
• Income: 38% earn under $50k
• Experience: Over 50% first-time investors

Robinhood customers tend to be millennial and Gen Z males in their 20s and 30s. The platform is especially popular with first-time investors just starting out.

Geographically, usage is highest in states like:

• California
• Texas
• Florida
• New York
• Illinois

These tend to be states with younger populations and tech-savvy millennials. Robinhood initially launched in California and spread eastwards as its popularity grew.

Here are some more demographic stats:

• Median household income of $76,200
• Over 50% have a college degree
• 10% are unemployed or part-time employed

So the typical Robinhood user is young, male, middle-income, and often investing for the first time. The app makes investing seem fun, easy, and social.

Next let‘s examine how Robinhood makes money from all these users…

Robinhood Revenue and Profit Breakdown

Robinhood has multiple revenue streams fueling its business model:

Payment for order flow (PFOF): Robinhood sends user orders to market makers like Citadel Securities and receives payment in return. PFOF accounted for over 75% of revenue in 2020.

Stock loan interest: Robinhood charges interest on stocks lent out to short sellers. This makes up around 17% of revenue.

Gold subscriptions: Robinhood Gold costs $5/month and gives users bigger instant deposits and margin trading ability.

Interchange fees: Robinhood earns a fee when users spend on their Robinhood debit card.

Cash interest: Robinhood generates interest revenue on uninvested cash in user accounts.

Cryptocurrency activity: Buying and selling crypto like Dogecoin generates transaction fees for Robinhood.

Robinhood‘s total revenue has rapidly increased over the past 5 years:

• 2017 – $81 million
• 2018 – $128 million
• 2019 – $278 million
• 2020 – $959 million
• 2021 – $1.82 billion

But despite the huge revenue growth, profitability has been inconsistent:

• 2017 – $6.9 million loss
• 2018 – $31.9 million loss
• 2019 – $106.6 million loss
• 2020 – $7.4 million profit
• 2021 – $502 million loss

The massive 2021 loss stemmed mainly from the $3+ billion Robinhood had to raise during the GameStop saga to meet capital requirements.

Excluding one-time factors, Robinhood can be profitable in normal market conditions. The path to high steady profits will depend on scaling revenue faster than operational costs rise.

How Does Robinhood Make Money? Breaking Down Business Model

As a commission-free platform, how does Robinhood actually generate up to $1.8 billion in annual revenue?

Robinhood‘s business model is different from traditional online brokers that charge commissions on trades. Here are the key ways Robinhood monetizes its 31+ million users:

Payment For Order Flow (PFOF)

The bulk of Robinhood‘s revenue (over 75% in 2020) comes from payment for order flow (PFOF).

Here‘s how it works:

When a Robinhood user places a trade order, Robinhood sends the order to a third-party market maker like Citadel Securities rather than directly to the exchange.

The market maker fills the trade order and pays Robinhood for the "order flow". The payment often ranges from a fraction of a penny to a few pennies per share traded.

Critics argue this creates a conflict of interest as Robinhood is incentivized to send trades to whoever pays the most, not the place that will get users the best price.

However, Robinhood states that the practice benefits users by allowing commission-free trades. And market makers are obligated to provide the National Best Bid and Offer (NBBO) price or better anyway.

PFOF has become integral to Robinhood‘s business model. They will likely continue relying heavily on selling order flow to market makers for revenue.

Stock Loan Interest

When a user buys a stock on margin via Robinhood Gold, the stock is eligible to be lent out to short sellers and hedge funds.

Robinhood receives interest payments in return from the borrowing parties. This makes up around 17% of total revenue.

Stock loan interest is very profitable as Robinhood pays users no part of the interest earned. However, it depends on having users trade on margin.

Gold Subscriptions

For $5/month, Robinhood Gold provides users with features like:

• Larger instant deposits up to $5000
• Margin trading with 2x buying power
• Additional research from Morningstar
• Level II NASDAQ market data

The subscription fees generate several hundred million in high-margin recurring revenue. Gold also helps incentive margin trading which boosts stock loan interest.

Cash Management and Debit Cards

Robinhood launched cash management accounts with debit cards in 2020. The checking accounts pay a 0.30% APY competitive with high-yield savings accounts.

Robinhood generates revenue from interchange fees when users spend on their debit cards. As cash management scales up, it could become a decent revenue stream.

However, the low 0.30% interest Robinhood earns on cash deposits limits the upside. Many users also maintain accounts just to spend their signup bonuses.

Cryptocurrency Transactions

Though Robinhood offers just 7 tradable cryptocurrencies, crypto transactions are surging. Dogecoin alone accounted for over 60% of crypto revenue in Q2 2021.

Robinhood charges around 2.5% on cryptocurrency buys and sells. As crypto trading volumes continue growing, transaction fees will become a larger revenue component.

Comparing Robinhood to E*Trade, Webull, and Charles Schwab

How does Robinhood‘s size and growth compare to competing investing apps and brokers? Let‘s compare some key stats.

Robinhood has the most funded accounts of any online broker at over 22 million. For context:

• *ETrade** – 5.2 million funded accounts
• Charles Schwab – 32 million brokerage accounts
• Fidelity – 35 million retail accounts
• TD Ameritrade – 15.7 million funded accounts

However, competitors like E*Trade and Schwab have significantly more assets under management:

• Robinhood – $98 billion
• *ETrade** – $1.1 trillion
• Charles Schwab – $7.3 trillion
• Fidelity – $9.9 trillion

This shows that while Robinhood has attracted the most users, competitors hold far more assets per account on average.

Robinhood also lags rivals in offering trading tools, research, retirement accounts, advisory services, and advanced education.

But Robinhood‘s target demographic of young mobile-first investors and traders may care less about those traditional features. They are drawn to Robinhood‘s simplicity, convenience, and social experience.

Most rivals now offer commission-free trading to compete with Robinhood. But competitors have far more revenue streams like asset management fees, advisor services, and corporate 401(k)s.

This gives them an advantage if payment for order flow is restricted in the future, hurting Robinhood‘s main revenue source.

Controversies and Criticisms of Robinhood

While immensely successful in attracting millennials, Robinhood has also faced its share of controversies in recent years:

GameStop Saga – Robinhood drew huge criticism for restricting buying of GameStop and other "meme stocks" during the short squeeze in January 2021. Many saw it as succumbing to pressure from hedge funds who stood to lose money. This crisis of confidence still impacts Robinhood‘s brand today.

Payment for Order Flow – As mentioned earlier, critics argue Robinhood‘s selling of order flow to market makers creates conflicts of interest and may result in worse trade execution prices for users.

Gamification – Robinhood‘s app uses many gamification techniques like colorful confetti and reward animations when users trade. Some view this as irresponsibly encouraging harmful trading behaviors.

Outages – The platform has suffered over 70 different outages since 2020. Crashes disable users from accessing their accounts during pivotal market events, leading to lawsuits.

Customer Service – Robinhood users frequently complain about poor customer service and inability to speak with human representatives.

The takeaway is that while Robinhood has undoubtedly innovated and succeeded in its mission to "democratize finance", its immense growth has not come without growing pains.

Concerns around business ethics, trading practices, and service quality have opened the door for competitors to woo former Robinhood customers.

The Future of Robinhood

What‘s next for Robinhood as it enters its second decade and matures as a company?

Here are a few potential directions for Robinhood‘s evolution:

• New Trading Options – Add new assets like futures, forex, and additional cryptocurrencies

• International Expansion – Launch service in countries like the UK, Europe, and Asia

• Premium Services – Create more subscription products with enhanced trading tools

• Retirement Accounts – Introduce IRAs and other tax-advantaged accounts

• Better Customer Service – Keep improving support with more human representatives

• Banking and Loans – Expand into areas like robo-advisory, consumer banking, and lending

While no longer a niche upstart, Robinhood still has tremendous room for growth in users, products, assets, and revenue.

International expansion and branching into financial services like banking could drive the next leg of hypergrowth for Robinhood.

Conclusion: How Many People Use Robinhood in 2024?

Thanks for sticking with me until the end of this comprehensive deep dive on Robinhood stats!

To summarize:

• Robinhood has over 31 million total users as of early 2024
• Around 21 million users are active monthly
• User growth exploded in 2020-2021 but has since stabilized
• The average Robinhood user is 31 years old and male
• Robinhood makes most revenue from order flow payments and Gold subscriptions
• Competition from Webull, Fidelity, and Schwab is increasing

While facing growing criticism, Robinhood still undoubtedly has a first-mover advantage with its slick, gamified app tailored to young investors.

As Robinhood rolls out new assets, premium features, and financial services, its user base could continue expanding rapidly. But rivals will work hard to siphon off users and market share.

Overall, Robinhood has cemented itself as a major force in fintech investing among millennials and Gen Z. It still has an exciting future ahead as Generation Robinhood gets more spending power.

Let me know if you have any other Robinhood questions! I‘m always happy to chat more about investing apps and strategies.