Robinhood Crypto Revenue Falls 38% as Prediction Markets Overtake It

Robinhood just posted a record quarter and still couldn’t outrun the crypto story. On July 29, 2026, the company reported Robinhood crypto revenue of $100 million for Q2, down 38% from a year ago, while a business almost nobody outside the company was tracking two years ago, event contracts, brought in $156 million. That’s the first time prediction markets have out earned crypto trading on Robinhood’s books, and it changes how you should read every headline about “crypto’s comeback” for the rest of 2026.

If you trade on the platform, build competing products, or just watch where retail speculative money flows next, this print matters more than the EPS beat everyone’s leading with.

The Numbers That Matter

Start with the headline figures, because the beat is real. Robinhood posted total net revenue of $1.31 billion, up 32% year over year, a record for the company. Diluted EPS came in at $0.62, well ahead of the roughly $0.43 to $0.45 that analysts compiled by FactSet had penciled in. Net income hit $573 million, up 48%, helped along by a $129 million gain tied to the deconsolidation of Robinhood Ventures Fund I.

And yet shares slid roughly 3 to 4% in after hours trading on July 29 (they’d already dropped about 3.1% during the regular session). Wall Street didn’t punish the beat. It punished the mix.

This is the second straight down quarter for crypto specifically. Q1 2026 crypto revenue was $134 million, itself down 47% year over year. Q2’s $100 million is a further 25% sequential drop. That’s not noise. That’s a trend line.

Why Prediction Markets Just Passed Crypto

Here’s the moment worth sitting with: event contracts, essentially regulated bets on real world outcomes, generated $156 million in Q2 on 13.6 billion contracts traded, a record. A year ago this line barely registered. Now it’s Robinhood’s fastest growing revenue category by a wide margin, and it’s bigger than crypto trading for the first time ever.

Robinhood runs this through Rothera, its CFTC licensed joint venture with Susquehanna, and the company has been explicit that this isn’t a side project. Kalshi’s CEO has already named Robinhood as a top competitor in the space, right alongside CME Group and the major sportsbooks. With NFL season starting and 2026 midterm election contracts ramping up, H2 volume in this category is likely to climb further.

The Bitstamp Problem: Volume Up, Revenue Down

The more interesting number is buried in the segment detail. Total crypto notional volume across Robinhood’s platforms was $40 billion: $18 billion on the core Robinhood app (down 35% year over year) and $22 billion through Bitstamp, the institutional exchange Robinhood acquired last year.

Bitstamp moved more volume than the retail app. It generated a fraction of the revenue, an estimated $6 million against the app’s roughly $94 million, according to figures derived from Robinhood’s own disclosures. Put plainly: Robinhood’s retail app converts crypto volume into revenue at something like 20 times the rate of its acquired institutional venue.

That gap tells you where the real fee compression is happening. It’s not primarily a retail demand collapse. It’s an institutional and wholesale margin story, and anyone benchmarking crypto exchange health against Robinhood’s numbers should separate the two before drawing conclusions.

Where the diversification actually shows up

Crypto now makes up roughly 7.6% of Robinhood’s total revenue, down from about 18% a year ago by CFO Shiv Verma’s own account on the Q1 call. That’s the number that should reframe how you read this earnings cycle. Robinhood didn’t stumble into diversification. It built toward it, deliberately, through Robinhood Chain, the WonderFi acquisition, event contracts, and products like Robinhood Legend and Agentic Trading.

“Whether it’s the Robinhood Chain, Robinhood Ventures, or Trump Accounts, our product velocity is focused on one goal: making everyone an owner.” Vlad Tenev, Chairman & CEO, Robinhood Markets, Inc. · Q2 2026 earnings release

“The business is firing on all cylinders.” Shiv Verma, Chief Financial Officer, Robinhood Markets, Inc. · Q2 2026 earnings release

Two moves closed just outside or right at the edge of the reporting window are worth flagging. Robinhood closed its roughly $180 million all cash acquisition of WonderFi (parent of Bitbuy and Coinsquare) on June 1, formally entering Canada with about 300,000 newly added funded customers. And Robinhood Chain, its Arbitrum based Ethereum Layer 2 for tokenized assets, launched its public mainnet on July 1, one day after the quarter closed, meaning it contributed zero dollars to this print despite already claiming more than $12 billion in cumulative DEX volume and 150 million transactions per a Bernstein research note.

“We’re bringing the best of traditional finance and DeFi together, and in doing so, expanding financial ownership to every corner of the globe.” Johann Kerbrat, SVP & General Manager of Crypto and International, Robinhood · Robinhood Newsroom, July 1, 2026

What Analysts Are Saying

The sell side is split on how much this quarter should worry anyone.

Bernstein’s Gautam Chhugani, who leads the firm’s digital assets coverage, kept an Outperform rating and a $160 price target even after cutting Robinhood’s full year 2026 crypto trading revenue estimate by 49%. His view: the crypto trading decline matters far less than the infrastructure being built around it, chain, tokenized stocks, Bitstamp, Robinhood Earn, which he frames as the company’s next set of crypto growth drivers once trading stops being the whole story.

Not everyone agrees the soft patch is temporary. Barclays analyst Benjamin Budish flagged the structural risk back in Q1, and the pattern he described played out again in Q2:

“Higher fee rates are paid by less active traders, and absent a more meaningful pickup in crypto asset prices, into which we have no visibility, it is hard to imagine this trend improving. Industry wide crypto volumes continue to weaken.” Benjamin Budish, Analyst, Barclays · via CNBC, April 29, 2026

Both can be true at once. Bernstein is making a multi year infrastructure bet. Budish is describing what happens to the trading line if crypto prices stay depressed. Robinhood’s tightened 2026 operating expense guidance, now $2.675 to $2.775 billion, down from a wider prior range, per FXStreet’s earnings breakdown, could read as discipline or as quiet caution about second half growth. It’s genuinely both, depending on how the next two quarters land.

What to Watch Through Year End

Three things will tell you whether this quarter was a turning point or a blip.

• Q3 2026 earnings, expected late October. This is the first full quarter with Robinhood Chain live the entire time. If chain activity doesn’t start showing up as transaction fee revenue by then, the infrastructure bet needs a longer timeline than the market may be willing to give it.
• Crypto asset prices in H2. Bitcoin has traded roughly 40 to 46% below year ago levels at various points in 2026. If that persists, expect crypto revenue to keep falling regardless of what Robinhood builds around it.
• Event contract volume through NFL season and the midterms. This is the line to watch if you’re trying to gauge whether the rotation from crypto to prediction markets accelerates or plateaus once the election cycle passes.

Is crypto “dying” at Robinhood? Not really, it’s shrinking as a share of a much bigger, more diversified pie, which is a different and less dramatic story than the headlines suggest.

FAQ

Why did Robinhood’s crypto revenue drop 38% in Q2 2026?

Robinhood’s crypto transaction revenue fell to $100 million from $160 million a year earlier as trading volumes softened industry wide. Robinhood App crypto notional volume dropped 35% year over year to $18 billion, while digital asset prices stayed well below year ago levels, cutting trade frequency and fee generation.

What is Robinhood Chain and when did it launch?

Robinhood Chain is a permissionless, Ethereum Layer 2 blockchain built on Arbitrum for tokenized real world assets and DeFi. Its public mainnet launched July 1, 2026, one day after Robinhood’s Q2 quarter closed, with day one partners including Uniswap and Pleiades.

How much crypto volume did Bitstamp process versus the Robinhood app?

In Q2 2026, Bitstamp processed $22 billion in crypto notional trading volume, more than the Robinhood app’s $18 billion, bringing total crypto volume to $40 billion. Despite the higher volume, Bitstamp generated a much smaller share of Robinhood’s total crypto revenue.

Are prediction markets replacing crypto trading on Robinhood?

Event contract revenue reached $156 million in Q2 2026, more than ten times higher year over year, surpassing crypto trading revenue of $100 million for the first time. It signals retail speculative dollars are rotating toward event contracts, not that crypto demand is disappearing.

Why did HOOD stock fall despite beating earnings estimates?

Robinhood beat consensus EPS and revenue estimates, but shares fell roughly 3 to 4% in after hours trading on July 29, 2026, as investors focused on the 38% crypto revenue decline and a tightened 2026 expense outlook, which some read as caution about second half growth.

Related reading: Robinhood’s international crypto expansion is unfolding against a shifting regulatory map, as EU perpetual futures, a UK crypto offering, and the WonderFi acquisition in Canada all land inside the same quarter.