Robinhood (NASDAQ: HOOD) stock faced a significant hit, plunging over 10% on Monday as a combination of waning retail investor activity and a brutal crypto market downturn took center stage. The sell-off pushed the stock to its lowest point since October, raising concerns about its dependency on cryptocurrency trading and speculation markets.
The Role of Cryptocurrency in Robinhood’s Business
In 2025, cryptocurrency trading revenue surged to $268 million per quarter, representing nearly 40% of Robinhood’s total transaction revenue. With a beta of 2.45, Robinhood operates as a high-risk levered bet on retail appetite for risk assets, especially cryptocurrencies like Bitcoin and Ethereum. The recent weekend crypto collapse, where Bitcoin saw a sharp decline from $83,800 to $74,570, erasing over $200 billion in market value, has put tremendous pressure on Robinhood’s performance.
For cryptocurrency enthusiasts, products like Ledger Nano X, a secure hardware wallet, can help investors safeguard their digital assets amidst volatile markets.
Prediction Markets Struggle Amid Seasonal Trends
Robinhood’s recent push into prediction markets, particularly through football contract trading launched in August 2025, was initially a success. By October 2025, 2.5 billion contracts had been traded. However, as football season winds down in February, seasonal revenue dips present a challenge. Robinhood is strategizing to fill this gap with NBA and MLB-related contracts, but the transition remains uncertain.
End-of-season trends in fintech typically cause valuation resets. Piper Sandler analysts flagged softer crypto trading volumes and seasonal cyclical risks as primary headwinds for the brokerage giant in the near term.
Looking Ahead: Earnings and Market Sentiments
Robinhood is slated to release its Q4 and full-year 2025 earnings on February 10. Analysts expect revenue growth of 32% year-over-year to $1.34 billion; however, expenses are predicted to rise, leading to a potential 38% decline in EPS compared to the previous year. With trading volumes dipping in equities (37%), options (28%), and crypto (12%), Robinhood must address its long-term growth strategy to regain market confidence.
Investor Outlook
Amid mounting challenges, Robinhood’s forward price-to-earnings ratio of 44 and price-to-sales ratio of 23 remain above industry norms. The stock currently faces resistance at $105, with support levels near $85. Investors should closely monitor guidance during the upcoming earnings report, particularly regarding crypto volatility and upcoming product launches in the prediction markets. As always, diversification remains key during uncertain financial periods.
For proactive investors, joining platforms like eToro can offer diversified investment solutions, including cryptocurrency trading and stock portfolios.
