Robinhood Stock Has Soared 45% From Its 52-Week Low. Here's Why I'm Predicting Another Sell-Off.

Robinhood Markets (NASDAQ: HOOD) operates an investing level wherever clients tin bargain and merchantability stocks, options, futures, cryptocurrency, and lawsuit contracts successful the prediction markets. Its banal was trading astatine a 52-week debased of $63 successful March, a 57% diminution from past year's grounds precocious of $154.

The sell-off was driven by weakness successful Robinhood's options and crypto trading businesses, which harvester to marque up the bulk of its transaction-based revenue. While options enactment recovered somewhat during the 2nd 4th of 2026, the crypto concern remained subdued.

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Robinhood banal has climbed much than 45% from its 52-week low, but here's wherefore I'm predicting different sell-off during the adjacent fewer months.

Robinhood's clients prosecute successful precise risky behaviour

Robinhood generated $1.3 cardinal successful gross during the 2026 2nd quarter, an awesome 32% summation from the year-ago period. Transaction-based gross accounted for $776 cardinal of that total, portion nett involvement income contributed $389 million.

Transaction-based gross is the wealth Robinhood earns from its halfway business, which involves processing trades connected behalf of its clients. Options trading was the largest contributor astatine $342 million, a 29% summation from the year-ago period. Crypto trading revenue, however, plummeted by 38% to conscionable $100 million. That isn't a surprise, fixed that large coins including Bitcoin and Ethereum are down sharply from their all-time highs, which has kept galore investors connected the sidelines.

Robinhood besides earned $156 cardinal from processing trades successful the prediction markets, which clients usage to marque bets connected everything from authorities to sports. Like options and crypto markets, prediction markets are highly risky, and that brings maine to a precise important point.

During the 2nd 4th of 2021, which was adjacent the tallness of the pandemic-related frenzy successful the fiscal markets, Robinhood earned a whopping 88% of its transaction-based gross from options and crypto trading alone. But conscionable 1 twelvemonth later, its options gross was down 31%, portion its crypto gross had plummeted by 75%.

Most investors who prosecute successful highly speculative trading successful options, crypto, and prediction markets suffer wealth successful the agelong run, which is unspeakable for Robinhood's lawsuit retention. In fact, successful the company's latest quarterly filing with the Securities and Exchange Commission, it cites speculative "meme" trading arsenic 1 of the cardinal reasons its gross fluctuates truthful erratically.