Robinhood stock plummeted on Wednesday following a disappointing fourth-quarter earnings report that revealed a significant decline in cryptocurrency trading revenue. The popular trading platform saw its shares drop as much as 13% after reporting revenue that fell short of Wall Street expectations, with Robinhood crypto revenue declining 38% compared to the previous period. The company reported earnings that beat consensus estimates, but weakness in cryptocurrency transactions overshadowed other areas of growth.
According to the company’s quarterly results, all other revenue categories recorded growth during the period, with prediction markets revenues increasing fivefold. However, the sharp decline in crypto trading activity weighed heavily on overall transaction revenues. The stock decline extended Robinhood’s losses to nearly 34% since the start of 2026, reflecting broader challenges facing cryptocurrency-focused platforms.
Cryptocurrency Market Struggles Impact Trading Platform
The decline in Robinhood crypto revenue mirrors broader weakness across digital asset markets. Bitcoin was down over 3% on Wednesday and has struggled with a 23% year-to-date decline. The leading cryptocurrency has failed to recover from last week’s significant risk-off rotation, even as other assets like technology stocks have managed to resume their upward trajectory.
Additionally, the cryptocurrency winter has created challenging conditions for platforms that rely heavily on digital asset trading volumes. The token’s inability to mount a meaningful comeback has raised concerns about sustained weakness in crypto-related revenues for trading platforms across the industry.
Company Remains Bullish Despite Revenue Headwinds
Despite the tumbling crypto revenue last quarter, Robinhood said it remains optimistic about the cryptocurrency sector’s long-term prospects. Meanwhile, CEO Vlad Tenev highlighted prediction markets as a rapidly emerging opportunity, predicting a “supercycle” in this new market segment. The company’s pivot toward diversification reflects efforts to reduce dependence on volatile cryptocurrency trading activity.
However, the company’s strong performance in prediction markets may not be enough to immediately offset crypto weaknesses. The fivefold increase in prediction markets revenue demonstrates growing user interest in alternative trading products, according to the quarterly report.
Wall Street Analysts Adjust Outlook
JPMorgan analysts reduced their price target for Robinhood to $113 from $130 while maintaining a Hold rating, citing “moderating top-line estimates.” The investment bank noted that fourth-quarter results were emblematic of Robinhood’s overall growth remaining impressive but decelerating from previous results over the past 12 to 18 months.
In contrast, the analysts acknowledged that prediction markets could serve as an offsetting source of growth in transaction revenue if the crypto downturn continues. They emphasized the potential for this emerging segment to help stabilize overall performance.
Mixed Sentiment Among Investment Firms
Elsewhere among Wall Street analysts, outlooks remain largely bullish for Robinhood despite the fourth-quarter miss. Truist analysts wrote that while they continue to like Robinhood’s long-term market positioning, the results underscore volatility given how market-dependent much of the company’s revenue remains, despite considerable progress on diversification in recent years.
Additionally, Direxion’s senior vice president of product and strategy, Ryan Lee, noted that Robinhood is well-positioned to capture trading volumes when the cryptocurrency winter ends. He emphasized that though crypto transactions have pulled back meaningfully from highs and the company missed on revenue, the retail broker stands ready to benefit from any market recovery.
Market observers will be watching for signs of stabilization in cryptocurrency markets and continued growth in prediction markets during the coming quarters. The timeline for any recovery in Robinhood crypto revenue remains uncertain as digital asset prices continue to face headwinds.
