Robinhood shares fell sharply on Wednesday after the trading platform reported weaker-than-expected first-quarter results, with a slowdown in crypto activity dragging on both revenue and profit.
The stock dropped around 11% following the release, as market volatility tied to digital assets limited trading volumes during the quarter.
Crypto markets have remained under pressure this year. Bitcoin has declined more than 30% over the past six months, as a sustained risk-off mood triggered sell-offs across digital assets and reduced participation from retail traders.
Robinhood’s transaction-based revenue rose 7% to $623 million in the January–March period, falling short of LSEG’s estimates of $728.2 million. Revenue from cryptocurrency trading totaled $134 million, down 47% from a year earlier, highlighting the extent of the slowdown in digital asset activity.
Analysts pointed to crypto as a key drag on performance. Morningstar described cryptocurrency trading as a “particular pressure point” during the quarter, adding that weakness in the segment contributed to a “rough” period for the company.
Retail investors, often referred to as mom-and-pop traders, typically scale back activity during periods of volatility as repeated price swings reduce confidence and lead to trading fatigue.
“Trading volumes have been choppier with signs of retail investor exhaustion, and revenue capture has trended lower in options and crypto,” analysts at Raymond James said in a note.
Competition has also intensified. The crypto sector has grown rapidly in recent years, with clearer regulatory signals encouraging new entrants. Alongside crypto-native exchanges, traditional firms such as Charles Schwab and E*TRADE have expanded their offerings, adding pressure on trading volumes across the industry.
“We expect competitive dynamics to continue to ratchet up in crypto,” analysts at KBW wrote, noting that volumes weakened across the sector in April.
Robinhood has been working to reduce its dependence on trading-driven income, which can fluctuate with market sentiment, and has been expanding into a wider set of financial services products.
The earnings setback comes at a time when security concerns have also surfaced around the platform, after David Schwartz warned of a targeted phishing campaign exploiting Robinhood users through seemingly legitimate emails ahead of the report.
According to Schwartz, the attack involves emails that appear to originate from Robinhood’s own system. Authentication checks such as SPF, DKIM, and DMARC reportedly pass successfully, making the messages look genuine.
