Prediction bets now pay Robinhood more than crypto trading does. Event contracts brought in $173 million in the third quarter, against just $120 million from crypto, and that flip tells you where retail money actually went while crypto volumes stayed soft.
Key points:
- Robinhood crypto revenue fell 55% from a year earlier to $120 million, but still beat the $114.1 million Wall Street expected.
- Prediction markets jumped to $173 million, more than six times last year's figure, and now out-earn crypto on the platform.
- Total revenue hit a record $1.42 billion, yet earnings of $0.51 per share missed the $0.55 forecast and shares slipped about 5% after hours.
The year-on-year drop looks brutal, but the quarter-on-quarter picture is less bleak. Crypto revenue actually rose 20% from $100 million in the second quarter, helped by Robinhood Chain, which brought in $26 million in its first quarter on mainnet. Strip the chain out, and underlying crypto transaction revenue was $94 million, down 6% from the previous quarter. Trading volume tells a similar mixed story: $50 billion in total, down 38% from a year earlier, yet up 23% from the second quarter, with $21 billion on the app and $29 billion through Bitstamp.
Read also: Robinhood Brings Ripple's $2.5B RLUSD to 28.6M Customers — What's Next?
Will traders care more about volume than the beat?
My own read is that the beat matters less than the mix. A $120 million crypto line that beats a lowered forecast is not a recovery, and prediction markets doing $173 million changes what Robinhood actually is: less a crypto trading venue this quarter, more an everything-market for bets on sports, elections and economic reports. The other lines underline that shift, with options revenue up 31% to $399 million and equities up 41% to $121 million.
The risk for crypto traders is simple. If volumes stay down year on year, the next quarter's comparison gets no easier, and the share price already shows the mood: shares closed near $94.61, fell about 5% after hours toward $89, and sit roughly 37% below their $150.47 high for the year. On the other side, Robinhood Chain processed more than $80 billion in decentralized exchange volume and pulled in over $50 million in fees, so the company has a second crypto engine that does not depend on app trading alone. Traders should watch whether that chain revenue grows, and whether app crypto volume keeps climbing from the second-quarter low, before calling this a bottom.
Read also: VanEck Wealth Builder ETF Puts 2% in Bitcoin — What's Next?
— BitByLine News Desk
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Sources: CoinDesk, Decrypt, The Block