Robinhood Markets (HOOD 3.67%) stock had an incredible run-up until October 2025. Over the three years prior to then, it gained about 1,300%. However, it's been falling since then, down almost 50% from the October high.
The trading platform is still reporting double-digit growth, but there could be more volatility ahead. Here's what to watch for.
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The prototype fintech company
Robinhood is known for its trading platform that attracts retail investors. Although equities trading is its main business, it has expanded into more speculative functions like options and cryptocurrency trading, in addition to many traditional financial services.
At this point, it has high exposure to cryptocurrency movements, which is why the stock has been falling. Bitcoin is down 30% over the past three months, leading the decline. Cryptocurrency trading accounts for a large portion of transaction revenue, and since it declined in the fourth quarter, total revenue growth decelerated from 100% in the third quarter to only 27% in the fourth quarter.
Here's what happened. Transaction revenue increased 15% year over year in the fourth quarter. That included a 41% increase in options revenue, a 54% increase in equities revenue, a 300% increase in other transaction revenue, and a 38% decline in cryptocurrency revenue. In the prior year, cryptocurrency revenue gained 700% and accounted for more than half of transaction revenue, which is why the impact was felt so strongly.
Robinhood doesn't usually provide this "other" revenue figure, but it's being fueled today by the fairly new category of prediction markets. That's why the increase was so high, since last year, the other category didn't have this driver, and instead comprised other new products.
NASDAQ: HOOD
Key Data Points
Risk and reward
The obvious thing to look for in Robinhood's trajectory is cryptocurrency trends. That's the main impacting feature in the near term. From a broader perspective, in order to envision Robinhood becoming a long-term viable company with growth potential, I'm watching how well it diversifies into more stable financial services. It already has a credit card and offers some banking services through a partner, and CEO Vlad Tenev says that it's building a "financial superapp."
If it's able to achieve that, it will become a much more stable and investable company.
