Robinhood's Crypto Revenue Halved as Trading Cools — and Coinbase Reports Thursday Into the Same Chill

Robinhood's third-quarter results, reported this week, read like a weather report for the whole crypto exchange business: cold, and getting colder in the one place that used to be warmest. Crypto transaction revenue fell 55% from a year earlier to $120 million, crypto trading volume fell 38%, and shares dropped about 8% in premarket trading on Wednesday after quarterly profit missed Wall Street expectations. The numbers confirm what traders have felt for months — spot crypto trading has gone quiet — and they set an unforgiving bar for Coinbase, which reports third-quarter earnings after the market closes on Thursday, October 29.

The quarter, in the numbers

The miss was not about the whole company. Robinhood's total net revenue rose 12% in the third quarter to $1.42 billion, and revenue from options and equities trading climbed. The problem was concentrated exactly where crypto bulls did not want it: the crypto desk. Per-share quarterly profit fell 16% to 51 cents, missing the 55 cents analysts expected, according to LSEG estimates. Shares closed at $94.56 before the report and traded around $88.90 in premarket trading on Wednesday, after an initial 8% premarket drop; CoinDesk's live coverage put the session decline at about 6%. Finnhub market data shows the stock down 21.49% over the past month and 19.16% year to date — a reminder that this quarter landed on an already-weakened share price.

The context behind the 55% drop is a market that has been grinding lower for months. Bitcoin has fallen nearly 28% over the past three months, according to Reuters, and spot bitcoin ETFs — the institutional bid that carried much of the year — only just returned to inflows this week, with $176 million on Tuesday for a second straight day. Trading activity across the industry hit multiyear lows in June before picking up in September, according to CoinDesk's earnings preview, and Robinhood's volume figures suggest that September pickup was not enough to rescue the quarter. Retail traders, facing higher oil prices, geopolitical tension and renewed rate-hike talk, pulled back from speculative bets — and crypto, the most speculative bet on most retail platforms, felt it first. For more market news and discussion, follow Zimbuck News at https://zimbuck.com/pages/zimbucknews and join the Zimbuck Market News group at https://zimbuck.com/groups/zimbuckmarketnews.

The bright spot that explains the strategy

If the crypto desk was the quarter's weakness, prediction markets were its answer. Robinhood's prediction markets brought in $173 million in the quarter — more than six times the year-earlier figure, and more than crypto trading itself. That single comparison explains the strategic pivot now visible across the whole sector: when spot crypto volumes dry up, exchanges sell something else to the same customer. Robinhood's agreement to add Crypto.com's prediction-market contracts to its app, alongside minority stakes in Crypto.com and OG, sits in the same logic — as does Crypto.com's own launch this week of regulated US perpetual futures, covered in our companion piece on the onshore perps race.

Analysts are split on what this means, and the split is the story. Bernstein and others with positive long-term views argue Robinhood's business is shifting toward infrastructure and new products — prediction markets, perpetual futures, tokenised assets — and that the legacy brokerage keeps performing well in what J.P. Morgan's Kenneth Worthington called "a near-perfect environment for retail traders." Bears read the same numbers differently: a 55% crypto revenue collapse is a demand signal, not a product-mix footnote, and no amount of prediction-market growth changes the fact that the core crypto customer traded much less. Both readings agree on one thing — the old model, in which a rising bitcoin price automatically meant rising exchange revenue, is not working right now.

What Coinbase must show on Thursday

That is the backdrop for Coinbase's Thursday report, and the questions are precise. Wall Street analysts expect Coinbase's trading activity to have improved from the second quarter, but disagree on how much revenue the rebound will generate. The September pickup in trading after June's multiyear lows is the bull case; the 55% Robinhood crypto decline is the bear case. Coinbase's offsets are different from Robinhood's: stablecoin income and a growing derivatives business could cushion sluggish spot trading, though analysts remain divided on the longer-term outlook. Much of Coinbase's recent share price action has also been driven by hopes for digital-asset legislation, hopes that dimmed after the CLARITY Act failed to gather sufficient bipartisan support, shifting focus to next week's midterm elections.

There is one more data point that cuts across the earnings gloom. Strategy's shareholders voted 99.3% in favour of paying daily dividends on its preferred stock, with STRC shares paying for every calendar day from November and the STRF, STRK and STRD classes following in January. It is a corporate-governance innovation, not an exchange result — but it shows the other side of the crypto equity trade: while trading revenues cool, crypto-linked companies are inventing new income products to keep investors interested. Whether that creativity sustains share prices through a cold trading winter is the question Thursday's Coinbase numbers will help answer. For the context on this week's earlier bitcoin-led bounce, see our earlier coverage at https://zimbuck.com/blogs/264/Memecoins-Lead-the-Crypto-Bounce-as-Bitcoin-Reclaims-81-000.

What to watch next

Three markers matter after Thursday. First, Coinbase's actual trading revenue versus the September-recovery narrative — a beat would suggest Robinhood's pain was partly company-specific, while a miss would confirm an industry-wide chill. Second, any disclosure on Coinbase's derivatives and perps plans, which would show whether it intends to chase the onshore perps race Crypto.com and Kraken have entered. Third, bitcoin itself: at about $81,220 with Friday's $11.7 billion options expiry ahead, the price action into the weekend will tell traders whether the earnings chill is a sentiment story or the start of a deeper leg down. Exchanges can diversify their revenue. They cannot diversify away from their customers' appetite — and this quarter, that appetite went missing.

FAQ
How bad was Robinhood's crypto quarter? Crypto transaction revenue fell 55% YoY to $120 million and crypto trading volume fell 38%; EPS of 51 cents missed the 55-cent consensus, and shares fell about 8% premarket.
Did the whole company miss? No — total net revenue rose 12% to $1.42 billion, equities and options revenue climbed, and prediction markets brought in $173 million, more than 6x a year earlier.
When does Coinbase report? After the market close on Thursday, October 29, 2026; analysts are divided on how much trading revenue recovered after June's multiyear lows.
Why does this matter for crypto prices? Exchange revenue tracks trading appetite; a 55% revenue drop plus bitcoin down nearly 28% over three months signals the retail bid is thin heading into Friday's $11.7B options expiry.

This article is market news and general information only, not financial advice. Do your own research and speak to a qualified adviser before making any investment decision.