Author: Michael Nadeau, The Defi Report
Compiled by: Glendon, Techub News
In this market cycle, the most outstanding performers are not traditional tokens but crypto stocks. Among them, $Robinhood (HOOD.US)$'s performance has been particularly strong. Today’s report provides a comprehensive update on the company’s fundamentals, valuation, and its ambitious expansion plans in the cryptocurrency and prediction markets, all based on detailed data.
Revenue and Revenue Growth
Robinhood is projected to reach $2.95 billion in revenue for 2024, representing a 58% increase from 2023. As of the third quarter of this year, its revenue has already reached $3.19 billion, surpassing the total for the entire previous year.
Over the past 12 months, the company's revenue reached $4.2 billion (a 31% increase compared to the same period last year).
Below, we will break down the revenue sources and growth across each business line.
Revenue Details
Key Takeaways
Robinhood's revenue has grown at a compound annual growth rate (CAGR) of 34% over the past five years. The company recorded a record net profit of $565 million in Q3 (a 271% increase from the same period last year).
Cryptocurrency operations accounted for 21% of Robinhood's total year-to-date (YTD) revenue (unchanged from last year).
Year-to-date, transaction-based revenue reached $1.85 billion (up from $1.65 billion in the same period in 2024). Overall, transaction-based revenue accounted for 58% of total revenue (down from 77% in 2021).
This indicates: 1) Growth in transaction-based revenue (covering equities, options, and cryptocurrencies); 2) Robinhood has been expanding its revenue streams.
What are these new revenue streams? Prediction markets (via Kalshi) have generated $100 million in annualized revenue, making it the fastest-growing business line in the company’s history.
Robinhood Gold now has 3.9 million paying users (at $5 per month), generating $234 million in annual subscription revenue.
Instant withdrawal fees, futures market fees, and swap revenue (Robinhood's credit card business) are included under 'Other Revenue'.
In addition to transaction-based revenue and new revenue streams, Robinhood achieved net interest income exceeding $1.1 billion as of the third quarter (accounting for 35% of total revenue).
Transaction-based revenue
Key Takeaways
Options are Robinhood's 'cash cow.'
Cryptocurrency ranks second, despite accounting for only 12% of equity trading volume.
This highlights Robinhood's adoption of a superior business model in the cryptocurrency trading sector.
Equity trading volume accounts for 88% of total trading volume, but trading revenue constitutes only 7%.
Fundamental Analysis
User
As of September 30, 2025, Robinhood had 27.1 million paying users. The user growth rate over the past five years was 22.6%, with most growth occurring in 2020.
Valuation comparison
Coinbase vs Robinhood
Coinbase's user base is only one-third that of Robinhood, but its revenue is nearly twice as much. Meanwhile, based on market capitalization, Coinbase is trading at a 53% discount to Robinhood. Why?
We believe the market favors Robinhood for the following reasons:
Diversified business covering stocks, options, prediction markets, and cryptocurrencies.
The market positions Robinhood as a "super app" entering the consumer/retail finance space, while Coinbase is still perceived as a "cryptocurrency exchange" (despite its broader range of services).
Regulatory licenses: Robinhood is registered as a broker-dealer and regulated by FINRA and the SEC. Coinbase lacks such qualifications, meaning it cannot offer services like stocks, options, or margin loans.
Robinhood boasts a larger and more active user base. However, since 2021, Coinbase’s user growth has been sluggish.
Moreover, in terms of traditional financial platforms, Robinhood’s revenue over the past twelve months accounted for 18% of Charles Schwab’s. Charles Schwab has 38 million active accounts (compared to Robinhood’s 27.1 million).
Product roadmap (cryptocurrency focus)
A brief history of Robinhood’s cryptocurrency business development.
2018
Robinhood has officially launched cryptocurrency trading in select states, initially supporting Bitcoin and Ethereum trading.
2019
Robinhood obtained the BitLicense issued by New York State, enabling it to provide cryptocurrency trading services in the state.
2020
Robinhood's cryptocurrency trading volume has shown significant growth. This aligns with a substantial increase in Robinhood's user base—interest in stock and cryptocurrency trading among retail investors was reignited during the pandemic, driving the company’s user expansion.
2021
Robinhood reported that cryptocurrency business revenue accounted for 41% of total revenue in the first quarter, primarily driven by Dogecoin trading (which made up 25% of overall revenue). Later in the same year, Robinhood filed for an IPO and noted that cryptocurrency trading was an essential part of its business.
2022
Robinhood announced plans to launch a cryptocurrency wallet feature, allowing users to deposit and withdraw crypto assets.
2023
Robinhood announced the addition of multiple cryptocurrencies for trading on its platform and plans to expand into the EU market.
2024
Robinhood announced a partnership with Arbitrum (Ethereum Layer 2), enabling users to trade cryptocurrencies through decentralized exchanges (DEX) on Arbitrum. Subsequently, the Robinhood team also announced integration with MetaMask, allowing users to purchase cryptocurrencies on Robinhood and fund their wallets via debit card, bank transfer, or existing Robinhood account balances.
The team later launched staking services and a cryptocurrency trading API for European customers, providing access to market data and programmatic order execution.
Acquisition of Bitstamp, a global cryptocurrency exchange with 4.4 million users and annual revenue of $200 million.
Support for Base (Coinbase’s Layer 2 project) has been launched.
Become the primary cryptocurrency gateway for retail traders (covering more assets, wallet access, integrated services, and low fees).
2025
Complete full integration of the Bitstamp exchange;
Robinhood Crypto Wallet v2 release (cross-chain swaps, DeFi connectivity, Arbitrum functionality, potential Base and Solana integrations, web3 wallet experience);
Await regulatory approval for U.S. cryptocurrency staking operations;
Provide institutional cryptocurrency services via Bitstamp;
Announce plans to build an L2 bridge on Arbitrum;
Announce plans to tokenize public and private equity (24/7 trading, instant settlement, DeFi integration, global accessibility for users outside the U.S., cost structure lower than traditional brokerage channels).
This final point marks the beginning of Robinhood’s full-scale entry into the cryptocurrency space, leveraging its infrastructure (Bitstamp, Robinhood Crypto, Arbitrum) and user base to position itself in the following areas:
Regulated global exchange
Custody solutions with integrated staking capabilities
Tokenization and Integration of DeFi
Wallet and Payment Services
Deposit/Withdrawal Channels
What is the Focus?
Robinhood is building a full-stack platform encompassing tokenization, cryptocurrency trading, and financial services.
Future Roadmap
Phase One (Currently Underway)
The EU currently has nearly 800 tokenized listed equities and is expanding into the private equity sector.
Trading exclusively through the Robinhood app (no external transfers allowed).
Built on Arbitrum
Phase Two (Early 2026)
Bitstamp enables round-the-clock trading, replicating the cryptocurrency trading model;
Facilitating global access and continuous liquidity.
Phase Three (End of 2026?):
Tokenized equities can be extracted and combined across DeFi platforms;
Users can utilize tokenized equities as collateral within DeFi protocols (e.g., Aave);
The ultimate vision: Fully permissionless, programmable assets beyond brokerage firms.
Why choose cryptocurrencies?
Unlike equity trading businesses (where Robinhood heavily relies on payment for order flow), cryptocurrency trading adopts a fundamentally different and more profitable business model. Due to the absence of NBBO (National Best Bid and Offer) in the cryptocurrency market, Robinhood does not need to sell order flow to market makers. Instead, it generates profits through spreads and routing revenues—earning the difference between the prices quoted to users and the prices at which it sources liquidity (via internal market-making or Bitstamp).
This means Robinhood has greater control over the economics of trading and can retain a higher proportion of revenue from each cryptocurrency transaction. The end result is significantly improved profit margins, higher average revenue per user (ARPU), and better operational leverage.
Global addressable market: Cryptocurrency trading operates 24/7, spanning across different jurisdictions and time zones.
Staking, tokenized stocks, swaps, wallet fees, Layer 2 fees, and programmatic cryptocurrency order flow can all expand profit margins and revenue.
Target user group: Robinhood primarily serves Millennials and Gen Z, who will inherit Baby Boomer wealth in the coming years and increasingly favor crypto-native services as well as Robinhood’s top-tier mobile experience.
Cryptocurrency infrastructure can reduce costs, create new revenue streams, and enhance operational leverage. As infrastructure matures, Robinhood is poised to become a gateway for DeFi, staking, trading, payments, and more.
Robinhood was an early mover into the cryptocurrency space, and with its large user base, comprehensive service offerings, and cryptocurrency infrastructure, it is building a moat. We believe that traditional platforms like Charles Schwab will find it challenging to compete as the customer demographic shifts.
Risks
Competition
Currently, all major brokerage firms and trading platforms are offering cryptocurrency trading services, including Charles Schwab, Fidelity, Interactive Brokers, Webull, and E*Trade.
They all aim to capture the high transaction fees from cryptocurrency trading. This competition is likely to squeeze Robinhood's profit margins.
Meanwhile, Coinbase leads in crypto-native infrastructure and product suites.
Execution Risk
The team faces the daunting task of seamlessly integrating Robinhood's user experience and mobile application with cryptocurrency platforms, which is no small feat.
Tokenization Strategy Risks
The true value of tokenization lies in the actual shares being tokenized.
Why?
This means that the shareholder’s crypto wallet (KYC-verified) will become the official record of ownership, implying that dividends will be paid directly into this wallet.
Robinhood does not have the authority to decide which stocks can or cannot be tokenized; the issuer (the company) holds the decision-making power.
Do they currently have an incentive to pursue tokenization?
We believe this remains to be seen. If possible, they would likely want to pursue tokenization for the following reasons:
Reducing issuance costs
Expanding distribution
Enhancing liquidity
Lowering settlement friction
Expanding new investor groups on a global scale
At present, none of these advantages are sufficient to drive large existing enterprises toward tokenization, especially before the introduction of new regulatory frameworks, making this even less likely.
Moreover, shareholders currently do not demand tokenization, and we believe that traditional service providers (such as transfer agents, prime brokers, custodians, clearing networks, market makers, fund administrators/middle offices) are opposed to it.
What is the Focus?
Robinhood has a strong incentive to promote tokenization. However, their influence over issuers' decisions to adopt tokenization is limited. We believe this process will take longer than the market currently anticipates.
Conclusion
Robinhood's revenue has achieved a compound annual growth rate (CAGR) of 34% over the past five years. In recent years, the platform has made significant progress across all trading business lines. New revenue streams from Robinhood Gold, prediction markets, and a series of crypto services (wallets, staking, transfers, European expansion, crypto co-branded cards, Arbitrum Layer 2), among others, indicate a promising future.
We commend its leadership team for delivering an exceptional user experience and pursuing a vision of 'going all-in on cryptocurrency.' From personal usage experience, the asset migration process is convenient and efficient. Notably, Robinhood is essentially launching a 'vampire attack' (a competitive strategy where a new protocol attracts liquidity, users, and trading volume from an established dominant protocol by offering significantly more attractive incentives, such as higher yields or token rewards) on companies like Charles Schwab, Fidelity, and Coinbase through its 'cash rewards for asset transfers' program (offering 2-4% cash back on the transferred value).
At the same time, Robinhood is challenging Coinbase in the crypto-native services space and taking a leading position in tokenization strategies. Therefore, we believe Robinhood has the potential to become a leading financial institution in the future.
In the field of crypto-native services, Robinhood is actively challenging Coinbase’s market position and has taken a leading role in tokenization strategies. Based on these factors, we believe Robinhood has the potential to become a leader in the financial industry in the future.
However, Robinhood’s current price-to-earnings (P/E) ratio stands at 56x. Our analysis suggests that its cryptocurrency-related revenue (which already accounts for 21% of total revenue and is a significant income component) may face some pressure in the short term, while risk appetite among individual investors also appears to be cooling.
In light of the precedent set in 2022, with a 25% decline in revenue and an 80% retracement in stock price, we anticipate that the company’s stock may experience a similarly significant correction amid the current risk-averse market environment. However, from another perspective, this could present an excellent buying opportunity for long-term investors.
Editor/Joryn
