Robinhood Stock Has Dropped 32% This Year. Is the Bottom Finally In?

As of this writing, Robinhood Markets' (NASDAQ: HOOD) stock price has fallen more than 32% in 2026. Part of that drop can be tied to an earnings report that fell short of expectations for some investors and alarmed others.

There's one narrative to watch that will determine if we're looking at the bottom, implying a buy-on-the-dip opportunity, or if the sell-off in the online trading platform and financial services company is likely to continue.

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Why Robinhood stock is struggling

In 2024, cryptocurrency revenue was adding to Robinhood's total revenue, but it wasn't until the last quarter of that year that it made most people stand up and take notice. Its Q4 2024 crypto revenue of $358 million was more than the combined total for the three previous quarters in that segment.

The good news for the company, then, was that crypto was becoming a noticeable driver of revenue growth. The bad news was that Robinhood was seeing revenue growth in a cyclical, volatile market that did not yield consistent results. While the fintech operator reported higher revenue from its cryptocurrency division in 2025, it didn't exceed $268 million in any given quarter.

Most recently, the inconsistency continued. For its 2026 first-quarter results, Robinhood reported cryptocurrency revenue of $134 million, down 47% from the prior quarter. Management noted on its earnings call that its cryptocurrency division is important but also sought to put that business segment in perspective relative to the rest of the company.

"First, we are crypto bullish, as Vlad [Tenev, CEO] said, but it's less than 20% of our revenue last year, about 18%. So it's an important part of the business, but we've vastly diversified," CFO Shiv Verma said. The company may have other revenue sources, but the markets are still largely fixated on that crypto revenue as a major growth driver. It also didn't help that Robinhood missed expectations on both total revenue and earnings per share.

For a bottom to be in, a crypto bull market would help alleviate concerns, which is a little outside Robinhood's control. What is in its control is expanding its revenue sources, like with its prediction markets.

Diversifying away from cryptointo prediction markets

By 2030, an analyst at Bernstein Research projects that the prediction market's trading volume will reach $1 trillion a year, which is a long-term opportunity for Robinhood.

Its transaction-based revenue rose 7% year over year to $623 million. That was driven by the company's "other transaction revenue," which mainly consists of its prediction market. That other transaction revenue climbed 320% to $147 million, and Robinhood expected its April prediction market volumes to total $3 billion, which would be its second-best month ever.

How long you plan to hold the stock will ultimately matter more than trying to call the bottom, and the prediction markets could prove to be a significant revenue source for Robinhood in the years ahead. But if you are planning to invest today, expect some choppiness for the Robinhood stock price until crypto sentiment picks up and trading activity increases.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.