Key Points
-
Robinhood’s revenue from cryptocurrency transactions declined by 47% last quarter.
-
The company generated significant growth from event contracts, but that only helped to offset some of the decline in crypto-related revenue.
- 10 stocks we like better than Robinhood Markets ›
Shares of Robinhood Markets (NASDAQ: HOOD) fell after the company released its latest quarterly numbers last week. Its results fell short of analyst expectations, and a big reason for that was lighter crypto trading. Robinhood’s platform can be used for stock trading, crypto trading, and making bets on prediction markets.
While the business has generated strong growth in recent years, the excitement (or lack of it) in the crypto markets can play a big role in its performance. The big question for growth investors, however, is whether it has become too dependent on crypto, and whether that could make the stock a risky option for the long term.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Crypto-related revenue crashed by 47% last quarter
During the first three months of 2026, Robinhood generated $623 million in transaction-based revenue, which was up a fairly modest rate of 7%. While event contracts (i.e., prediction markets) have unlocked a huge new growth opportunity for the business, that relatively new revenue stream (which totaled $104 million and was up from just $3 million a year ago) merely helped to offset the sluggish performance in crypto trading; Robinhood generated $134 million from cryptocurrency transactions during the period, which was a decrease of 47% from the same period last year.
Cryptocurrency transactions accounted for 43% of the company’s total transaction revenue in the prior-year period, and that share dropped to just 22% this past quarter. It’s good that the business is becoming more diversified, but it also highlights just how much of its growth has come from cryptocurrency trading.
Robinhood’s business has plenty of growth potential, but it doesn’t come without risks
Robinhood’s success over the years has come from its ability to draw in retail investors, who look to its platform as a one-stop option for all types of trading. The challenge for Robinhood, however, is that with an increasing number of ways for people to make predictions, trade cryptocurrencies, and buy and sell stocks, whether it will continue to be as popular as it has been in recent years is the big question moving forward. That uncertainty, along with a fairly high dependence on crypto trading, does make the stock a bit of a risky buy.
While Robinhood stock has the potential to rise higher in the long run, its valuation isn’t all that cheap; the stock trades at close to 40 times its trailing earnings. If its growth rate isn’t strong, it’ll be difficult for investors to justify paying such a high multiple for the stock.
If you’re OK with the risks that come with the stock, it may be worth buying on weakness right now, as it is down more than 30% since the start of the year. However, with its valuation still not being all that cheap and question marks hovering around its long-term growth, a rally may not necessarily be around the corner; this is an investment that will require patience.
Should you buy stock in Robinhood Markets right now?
Before you buy stock in Robinhood Markets, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Robinhood Markets wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $496,473!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,216,605!*
Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 202% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 4, 2026.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
