Source: The DeFi Report
Author: Michael Nadeau
Compiled and edited by: BitpushNews
Some of the best-performing "Altcoin" in this cycle aren't even tokens—they're crypto-asset-related stocks. Robinhood is undoubtedly the one with the most dramatic rise.
Its stock price rose 17 times in less than two years, turning one of our most contrarian investments (HOOD had fallen 80% from its IPO price in '22) into a major win in our portfolio.
We first accumulated shares during the last bear market (average cost of $21.49) and exited in October, locking in a gain of over 550%.
Now, with its product development momentum accelerating and its revenue structure becoming more diversified than it was two years ago, Robinhood has officially returned to our "watch list" (our bear market shopping list).
This report is an update on the company's fundamentals, valuation, and its strategy to move deeper into crypto assets and prediction markets, based on data.
Disclaimer: The views expressed are those of the author and should not be relied upon as investment advice.
Revenue and Revenue Growth
Data source: Yahoo Finance, Robinhood
Robinhood generated $2.95 billion in revenue in 2024, a 58% increase over 2023. As of the third quarter of this year, it had already generated $3.19 billion in revenue—exceeding its total for the entire previous year.
Over the past twelve months, the company's revenue reached $4.2 billion (a year-on-year increase of 31%).
Below, we will break down the revenue sources and growth of each business line.
Revenue Composition Analysis 
Data source: Robinhood 10Q
Key points
Robinhood's revenue has grown at a compound annual growth rate (CAGR) of 34% over the past five years. It generated a record net profit of $565 million in the third quarter (a 271% year-over-year increase).
Cryptocurrency accounts for 21% of Robinhood’s total revenue so far this year (the same as last year).
Year-to-date transaction-based revenue is $1.85 billion (up from $1.65 billion in 2024). Overall, transaction-based revenue accounts for 58% of total revenue (down from 77% in 2021).
This tells us that 1) transaction-based revenue is growing (including stocks, options , and cryptocurrencies).
And 2) Robinhood has been adding new revenue streams.
What are these new revenue streams? Prediction markets (via Kalshi ) have reached $100 million in annualized revenue. This is their fastest-growing business line ever.
Robinhood Gold now has 3.9 million users who pay $5 per month, generating $234 million in annual subscription revenue. We use the product ourselves.
Instant withdrawal fees, futures market earnings, and exchange income (Robinhood credit card) have been added to the "Other Income" category.
In addition to its transaction-based revenue and new revenue streams, Robinhood generated over $1.1 billion in net interest income (35% of total revenue) in the third quarter.
Revenue based on transactions
Data source: Robinhood 10Q
Key points
Options are Robinhood's cash cow.
Cryptocurrencies ranked second, despite accounting for only 12% of stock trading volume.
This highlights the exceptional business model of cryptocurrency trading that Robinhood has discovered.
Stock trading accounts for 88% of trading volume, but only 7% of trading revenue.
Fundamentals
user
Data source: Robinhood
As of September 30, 2025, Robinhood had 27.1 million paid customers. The five-year compound annual growth rate for user growth was 22.6%, with most of the growth occurring in 2020.
Valuation comparison
Some thoughts
Hyperliquid (perpetual contracts + spot trading) dominates in trading volume but generates the least revenue.
Uniswap faces its biggest challenge in monetizing users because historically 100% of transaction fees have been paid to liquidity providers (a recent governance proposal is changing this).
COIN vs HOOD
Coinbase has one-third the user base of Robinhood, but its revenue is almost twice that of Robinhood.
However, in terms of market capitalization, Coinbase is trading at a 53% discount to Robinhood.
Why?
We believe the market favors Robinhood because:
A diversified business encompassing stocks, options, prediction markets, and cryptocurrencies.
Robinhood is seen as a "super app" and is venturing into the consumer/retail finance sector. Coinbase is still considered a "cryptocurrency exchange " (although its business extends far beyond that).
Regulatory licenses. Robinhood is registered as a broker-dealer and is regulated by FINRA and the SEC. Coinbase, on the other hand, cannot offer stocks, options, margin lending, etc.
It boasts a larger and more active user base. Coinbase has struggled with user growth since 2021.
Compared to traditional financial companies, Robinhood's revenue over the past twelve months was 18% of Charles Schwab's. Charles Schwab has 38 million active accounts (Robinhood has 27.1 million).
Product Roadmap
A brief history of Robinhood's crypto development:
2018
Robinhood has officially launched cryptocurrency trading in select states, initially supporting BTC and ETH.
2019
It obtained a BitLicense from New York State, which allows it to offer cryptocurrency trading in New York.
2020
Crypto asset trading volume has increased significantly. This coincides with a substantial increase in Robinhood's user base, as the COVID-19 pandemic marks a period of renewed interest among retail investors in stocks and crypto asset trading.
2021
Robinhood reported that crypto asset trading accounted for 41% of its revenue in the first quarter, primarily driven by Dogecoin trading (which accounted for 25% of all revenue!). Later that year, Robinhood filed for an IPO, noting that crypto asset trading was a significant part of its business.
2022
They announced the launch of a crypto wallet feature, allowing users to deposit and withdraw crypto assets.
2023
They announced the addition of several new crypto assets for trading on their platform and plans to expand into the European Union.
2024
The team announced a partnership with Arbitrum (an Ethereum Layer 2 network), allowing users to access DEX swap trading on Arbitrum. They subsequently announced an integration with MetaMask, enabling users to purchase crypto assets on Robinhood and fund their wallets via debit cards, bank transfers, or existing Robinhood account funds.
Subsequently, staking services and a crypto trading API were launched for European clients, providing access to market data and programmatic order functionality.
Acquired global crypto exchage Bitstamp, which has 4.4 million users and $200 million in revenue.
Announced support for Base (Coinbase's L2).
Become the primary entry point for crypto assets for retail traders (more assets, wallet access, integration, low fees).
2025
Fully integrate the Bitstamp exchange.
Launch Robinhood crypto wallet v2 (cross-chain swaps, DeFi connectivity, Arbitrum functionality, potential Base and Solana swaps, Web3 wallet experience).
Awaiting approval for US crypto asset staking services.
Provide institutional crypto asset services through Bitstamp.
They announced plans to build an L2 on Arbitrum.
The company announced plans to tokenize its public and private equity offerings (24/7 trading, instant settlement, DeFi integration, global access for users outside the U.S., and a lower cost structure compared to traditional brokerage channels).
Finally, this is where Robinhood sowed the seeds for "full cryptography," leveraging its infrastructure ( Bitstamp , Robinhood Crypto, Arbitrum) and user base to encompass:
Regulated global exchanges
Integrated staking custody solution
Tokenization integrated with DeFi
Wallets and Payments
Deposit and withdrawal channels
What is the conclusion?
Robinhood is building a full-stack platform for tokenization, crypto asset trading, and financial services.
Future Roadmap
Phase 1 (In Progress)
The EU already has nearly 800 tokenized public stocks listed and is expanding into private equity.
Transactions are only accepted within the Robinhood app (external transfers are not supported).
Built on Arbitrum.
Phase Two (Early 26)
Enable 24/7 trading with Bitstamp, synchronized with cryptocurrency trading.
Global access + continuous liquidity.
Phase Three (End of 2026?)
Tokenized stocks become withdrawable and can be combined for use in DeFi.
Users can use tokenized shares as collateral in DeFi (e.g., in Aave).
Ultimate Vision: Beyond traditional brokerage, completely permissionless, programmable assets.
Why choose encryption?
Unlike stocks (where Robinhood heavily relies on order flow payments), cryptocurrency trading uses a completely different and more profitable revenue model . Since there is no NBBO (National Best Buy/Sell) in the cryptocurrency market, Robinhood doesn't sell its order flow to market makers. Instead, it earns revenue through spreads and routing economics , capturing the difference between the price it quotes to users and the price at which it purchases liquidity (internally through market makers or via Bitstamp).
This means they have more control over the trading economy and can retain a higher percentage of revenue from each cryptocurrency transaction. The end result is significantly higher profit margins, higher ARPU (average revenue per user), and better operating leverage .
A globally addressable market . Cryptocurrency transactions are available 24/7 and operate across jurisdictions and time zones.
Staking, tokenized stocks, swaps, wallet fees, L2 fees, and programmatic cryptocurrency order flow can all increase profit margins and revenue.
Demographics . Robinhood primarily serves Millennials and Generation Z, who will inherit the wealth of the Baby Boomer generation in the coming years and increasingly appreciate the combination of cryptocurrency-native services and Robinhood's top-notch mobile experience.
Cryptocurrency tracks have reduced costs, generated new revenue streams, and increased operational leverage. With the infrastructure in place, Robinhood could become the "front door" for DeFi, staking, trading, payments, and more.
By initially sprinting into cryptocurrency, Robinhood is building a moat through its 1) user base, 2) suite of services, and 3) cryptocurrency infrastructure . We believe this will be difficult for existing platforms like Charles Schwab to compete with, especially given the changing customer demographics.
risk
compete
Cryptocurrency trading is currently available on every major brokerage and trading platform. Charles Schwab, Fidelity, Interactive Brokers, Webull, and E*Trade are among them.
They're all drawn by the hefty cryptocurrency transaction fees . This competition could squeeze Robinhood's profit margins.
Meanwhile, Coinbase is a leader in cryptocurrency-native infrastructure and product suites .
Execution risk
The team faces a daunting task : combining Robinhood's top-notch user experience and mobile app with the cryptocurrency track, no easy feat.
Risks of tokenization strategies
The real benefit of tokenization is that actual shares are tokenized .
Why?
This means that the shareholder's cryptocurrency wallet (which has passed KYC) is the official record of ownership . This means that dividends will be paid into the wallet.
Currently, Robinhood cannot decide which shares are tokenized and which are not . That's the decision of the issuer (company).
Do they have the incentive to tokenize today?
In our view, this remains to be determined . We believe that if they are able to:
Reduce issuance costs
Expand distribution channels
Improve liquidity
Reduce settlement friction
Unlocking new investor groups globally
They will then want to tokenize it.
Today, these benefits are insufficient to incentivize large, existing companies to tokenize. And certainly not until new regulations are introduced .
Furthermore, their shareholders are not demanding this today. Moreover, we believe that existing service providers , such as transfer agents, prime brokers, custodians, clearing networks, market makers, and fund administration/back-office staff, are opposed to this.
What are the key points?
Robinhood has a strong incentive to push for tokenization. However, they have limited control over issuers adopting tokenization . We believe this will take longer than the market currently expects.
Summarize
Robinhood's revenue has grown at a compound annual growth rate of 34% over the past five years. In recent years, the growth has come from all trading lines (cryptocurrencies, stocks, and options).
Additional revenue from Robinhood Gold, prediction markets, and cryptocurrency services (wallets, staking, transfers, European expansion, cryptocurrency-linked cards, Arbitrum L2) suggests a promising revenue outlook.
We love this leadership team . Their track record of delivering outstanding user experiences , and their vision for “full encryption.”
By using this product to transfer assets (the process is seamless and fast) and by offering incentives for asset transfers (cash rewards of 2-4% of the asset value), Robinhood is actually launching a vampire attack on companies like Charles Schwab, Fidelity, and Coinbase.
At the same time, they are now challenging Coinbase on cryptocurrency-native services and are leading the way in tokenization strategies .
We believe Robinhood has the potential to become a leading financial institution in the future .
That said, it is currently trading at 56 times its price-to-earnings ratio. We believe that cryptocurrency revenue (which now accounts for a significant 21% of total revenue) will be hit in the short term, along with the generally risk-averse sentiment among retail investors.
Given the 25% revenue decline in 2022 and the 80% drawdown, we could see similar significant corrections in a risk-averse environment . We believe this could present an excellent buying opportunity for long-term holding.
That's why HOOD is on our watchlist.
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