Robinhood Shares Plunge Amid Crypto Slump And Market Jitters

On February 2, 2026, Robinhood Markets found itself in the harsh glare of the financial spotlight, ending the day as the worst-performing stock in the S&P 500. The company’s shares dropped a steep 8% amid a broader selloff in crypto-related stocks, a decline that left many investors wondering: what’s behind Robinhood’s recent volatility, and where does the fintech pioneer go from here?

According to The Wall Street Journal, Robinhood’s tumble coincided with a sharp drop in bitcoin’s price, which slid under $80,000 and has fallen 19% over the past week. The ripple effect hit other crypto stocks as well—Mara Holdings slipped 2%, Coinbase Global fell 3%, and Bullish was off nearly 2%. The connection is no coincidence. As a platform deeply tied to the fortunes of retail trading and digital assets, Robinhood’s fate is often closely linked to the wild swings of the cryptocurrency market.

But crypto wasn’t the only headwind. As reported by Dow Jones, the end of football season may have contributed to Robinhood’s stock decline. The company recently launched a prediction market, allowing users to wager on outcomes, including sports events. With the football season wrapping up, a key source of prediction market revenue is drying up—at least temporarily.

Despite these short-term setbacks, Robinhood’s recent growth has been nothing short of extraordinary. Data from Morningstar.com cited by The Motley Fool shows that Robinhood delivered an average annual return of 120.44% over the past year and 116.37% over the past three years (as of January 27, 2026). In the third quarter alone, revenue soared 100% year over year to $1.27 billion, and net income surged 271% to $556 million. Net interest revenue jumped 66%, and average revenue per user shot up 82% to $191. Even as total operating expenses climbed 31%, the company’s explosive revenue growth more than outpaced costs.

Robinhood’s business model—offering commission-free trading, fractional shares, and no minimums—has been especially popular with younger, first-time investors. Its rapid expansion into new services, including the aforementioned prediction markets, has helped sustain its growth streak. But some analysts are sounding a note of caution. As The Motley Fool put it, "The main reason I’m taking a bearish stance on the company is its recent steep valuation. Its forward-looking price-to-earnings (P/E) ratio and its current P/E ratio were both recently around 44, which is a bit lofty. And its recent price-to-sales ratio of 23 is way above its five-year average of 7. (And even 7 is a rich price-to-sales figure.)"

In other words, Robinhood’s stock might be priced for perfection. With a high beta of 2.45, its shares are notably more volatile than the broader market—a double-edged sword in turbulent times. Piper Sandler, however, remains bullish, reiterating an Overweight rating and a $155 price target despite the pullback. According to Investing.com, "This target sits within the analyst range of $90-$180, according to InvestingPro data." Piper Sandler also highlighted that Robinhood is "the closest fintech platform they’ve observed to achieving 'super app' status," reinforcing their positive long-term outlook.

Not all analysts are quite so optimistic. Cantor Fitzgerald recently initiated coverage with an Overweight rating and a $130 price target, highlighting Robinhood’s growth potential but also acknowledging the risks inherent in such a fast-moving sector. The company’s shares have declined approximately 35% from their all-time closing high of $152.46 on October 9, 2025, to $99.48 as of early February 2026. According to Piper Sandler, the stock’s RSI indicates it’s in oversold territory.

What’s driving this volatility? Three main factors, according to Piper Sandler: a slowdown in cryptocurrency trading volumes and declining token prices; the conclusion of the football season, which is expected to impact prediction market revenues; and growing uncertainty about the sustainability of recent retail trading strength. As the crypto market cools and the sports calendar quiets down, Robinhood is left to prove that its growth story has legs beyond these cyclical booms.

Meanwhile, Robinhood isn’t standing still. The company has been busy expanding its offerings and strategic ventures. In the UK, Robinhood is launching a stocks & shares ISA, featuring no platform fees, no commissions, a 0.10% FX fee per trade, and a 2% cash bonus on new eligible contributions made before April 2026. In the United States, the federal government is reportedly considering Robinhood for a role in overseeing new "Trump accounts" for children, with an announcement expected soon—a move that could further cement its status as a go-to platform for retail investors.

Robinhood is also vying for a significant allocation of shares in SpaceX’s highly anticipated initial public offering, aiming to offer these shares to retail investors through its IPO Access platform. Such a move would be a coup for Robinhood, giving its users access to one of the most coveted IPOs in recent memory. In addition, the company recently completed the acquisition of a 90% stake in MIAX Derivatives Exchange through a joint venture with Susquehanna International Group, with MIAX retaining a 10% stake. The exchange is approved to list and clear a variety of financial products, further broadening Robinhood’s reach in the financial services space.

Despite the recent selloff, some see opportunity. Piper Sandler’s analysis suggests that the current pullback may be overdone, with the stock’s relative strength index (RSI) now indicating oversold conditions. For long-term investors, the company’s continued innovation and aggressive expansion into new markets could be a reason to stay the course. As The Motley Fool suggests, "Go ahead and consider buying the stock—or steering clear for now. It might jump by, say, 50% this year, or it might drop by, say, 50%. If you do buy, you might want to do so in increments, in case the stock drops in the near future. And do so only if you’re planning to hang on to those shares for a long time—in case the stock does dip and needs time to recover."

Yet, with the stock’s forward P/E and price-to-sales ratios far outpacing historical averages, even bullish analysts acknowledge the risks. The fintech sector is notoriously competitive, and Robinhood’s fortunes are tightly bound to the unpredictable tides of retail sentiment and crypto markets. Its high volatility means big swings are part of the package, for better or worse.

For now, Robinhood’s story is one of dizzying highs and sharp corrections, with the company at a crossroads. Will it manage to sustain its growth and cement its place as the leading "super app" for retail investors, or will the pressures of valuation and market cycles catch up? Investors—and the market at large—will be watching closely in the months ahead.

Robinhood’s next moves, from its UK expansion to potential government partnerships and major IPO allocations, could shape not just its own future, but the broader landscape of retail investing. As the dust settles from this latest selloff, one thing is certain: Robinhood remains a company to watch, for both its promise and its pitfalls.