Robinhood's Crypto Revenue Sinks 55% as Prediction Bets Steal the Crown

Robinhood dropped its third-quarter earnings on October 27, and the headline number looked great: total revenue climbed 12% year over year to a record $1.42 billion. But the guts of the print show a rotation nobody in the crypto crowd wants to talk about. Crypto transaction revenue fell 55% from a year earlier, landing at about $120 million, according to The Motley Fool's review of the quarter. Prediction markets — a business Robinhood only entered in 2025 — pulled in about $173 million, more than six times the $27 million it made a year earlier, and cruised right past crypto as the company's top trading line.

The old reliable engine sputtered too. Net interest revenue slipped roughly 9% to $415 million as securities lending and short-term rates eased, and funded customers grew 7% to 28.7 million. That left trading lines carrying the quarter, and only one of them grew. CoinPaper's analysis puts the math in stark terms: because mature stock markets price trades so efficiently, a single prediction trade can earn Robinhood up to 175 times what a stock trade yields. Customers moved an estimated 16.4 billion event contracts in the quarter.

This pivot is engineered, not accidental. Robinhood jumped into prediction markets through a Kalshi partnership in March 2025, built its own exchange called Rothera in a venture with Susquehanna, and in January 2026 closed its purchase of MIAXdx, picking up a CFTC-licensed exchange and clearinghouse. The regulatory framing matters: these are event derivatives under the CFTC, not gambling. But the same regulator is already suing over a state's bid to shut down contract markets and fighting over where prediction markets end and sportsbooks begin. The growth is real; the legal footing is still being written.

Then there's Robinhood Chain, where the fireworks live. Its mainnet opened July 1 as an Ethereum layer-2 built with Arbitrum. On November 3, Uniswap said the chain became the fastest network ever to hit $100 billion in cumulative volume on its protocol — about 125 days, or roughly $800 million a day. Total value locked crossed $1.07 billion the next day. Management told investors the chain handled around $100 billion in DEX trading and earned over $50 million in fees in its first quarter. That fee check is about 3.5% of the $1.42 billion Robinhood took in. A genuine record, and a small check.

Tokenized equity is the bridge between the two tapes. Shares of more than 190 U.S. companies trade on the network, every transfer throws off a fee, and some tokens are paired with meme coins that hand tokenized shares to holders. The catch: most U.S. investors can't buy them directly, since they're backed by offshore debt products closed to U.S. persons. Robinhood added voting rights and in-kind redemptions for holders in late August — a real step — while the network's earliest days drew scrutiny over coordinated funding behind launchpad launches.

The stock has not gotten cheap. Ainvest market data put HOOD near $81 in early November, down roughly 42% from its 52-week high near $140 and about 28% lower on the year. It still trades at a price-to-sales ratio near 14x, a trailing P/E near 37x and a forward P/E closer to 50x. A run back to all-time highs is roughly 70% away from here, and that's a tape call, not an earnings call. Watch whether event-contract revenue keeps compounding — or a regulator draws a line first — and whether $100 billion in volume turns into a fee line that grows instead of a headline that doesn't.