Robinhood’s $221 million decline in cryptocurrency revenue indicates that the crypto downturn is not reflected on the blockchain, as retail investors have already shifted away.

Crypto winter faces a branding challenge.

The term suggests a period of inactivity, where wallets cease to transact, and the entire ecosystem becomes dormant. However, the most compelling evidence of retail withdrawal often does not manifest on-chain.

The initial drop in participation typically comes from casual users, not the power users who are actively bridging stablecoins into DeFi or the long-term holders transferring assets between cold storage wallets. These casual participants engage when the risk seems appealing, use a brokerage app to make market purchases, and then vanish without leaving a clear on-chain trace.

This is why the most effective retail indicator can be found in a frequently overlooked area: the earnings reports of Robinhood and Coinbase.

As retail activity diminishes, brokers experience a decline in trades, reduced notional values, and decreased transaction revenue. Conversely, when retail interest increases, it is reflected in heightened engagement and greater revenue.

A Bitcoin chart may appear vibrant even as participation declines, as price movements can be driven by a smaller group of buyers utilizing ETFs, futures, and other structured financial products.

A decline in participation can occur alongside a price increase. The recent reports from these two companies illustrate how this divergence manifests in reality.

Robinhood’s fourth quarter results clearly highlight this point with figures that are difficult to dispute. Total net revenues increased by 27% year over year to $1.28 billion, with transaction-based revenues rising 15% to $776 million.

However, the breakdown of that revenue is significant.

Options revenue reached $314 million, a 41% increase, while equities revenue climbed to $94 million, up 54%. In contrast, crypto revenue dropped to $221 million, a 38% decrease year over year.

This illustrates what a retail shift looks like.

Coinbase, often viewed as a barometer for retail crypto demand, reported a similar cooling from a different perspective.

In its Q4’25 shareholder letter, total revenue was $1.781 billion, with transaction revenue at $982.7 million and subscription and services revenue at $727.4 million. Consumer transaction revenue for the quarter was $733.9 million, down from $843.5 million in Q3. Institutional transaction revenue increased to $185.0 million from $135.0 million. The company also reported a net loss of $667 million for the quarter.

When combined, these figures reveal the same issue as Robinhood: retail activity has decreased, leading the business to rely more heavily on non-transaction revenue streams, with the quarter generating more from its services than from trading.

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The retail barometer lives in broker P&L

On-chain metrics can indicate whether large holders are distributing assets, whether long-term holders are spending, whether stablecoin supply is increasing, and whether the base layer is active.

However, they can also mislead regarding retail participation, as the retail cycle revolves around individuals actively trading, not merely coins changing hands.

A significant portion of today’s trading occurs within structures that the blockchain does not register. If someone acquires exposure through a broker, hedges it with listed options, or trades within an internal venue, the user experience may appear busy, but the blockchain can seem tranquil.

Robinhood is designed around that user experience, allowing us to view its quarterly report as a behavioral analysis with a profit and loss statement attached. The company concluded Q4 with 27 million funded customers and an average revenue per user (ARPU) of $191.

While these may not be crypto-specific metrics, they are precisely what is needed to address a fundamental question: are people still engaging?

The answer regarding participation in Robinhood’s case is affirmative.

However, the answer concerning risk is more nuanced: retail has gravitated towards instruments that provide defined outcomes and rapid feedback, with options and event contracts being the most favored.

Operational data clarifies this trend.

Options contracts traded reached 659 million in Q4, a 38% increase year over year. Crypto notional trading volumes were $82 billion, with $48 billion associated with Bitstamp and $34 billion on the Robinhood app, where notional trading fell 52% year over year. Event contracts traded totaled 8.5 billion in Q4.

Robinhood can label 2025 as a record year while still illustrating a crypto winter in the areas that genuinely impact a retail-focused broker: the crypto revenue line and the app’s crypto notional trading.

Transaction-based revenue benefited from equities and options, while crypto lagged at $221 million, falling short of higher expectations. This contributed to the quarter’s disappointment, despite record net revenue.

This is significant because it frames the weakness of the crypto winter as a participation issue rather than a product failure. The platform retained its audience, but that audience engaged less in crypto trading.

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Coinbase is distinct because it is more closely aligned with the core venue economy. Retail and institutional flows share the same brand, even if they behave differently.

The shareholder letter outlines the shift in revenue mix without requiring additional interpretation: transaction revenue for Q4 was $983 million, a 6% decline quarter over quarter.

Coinbase attributes the decrease in consumer revenue to lower consumer spot volume and shifts in revenue mix. Institutional transaction revenue increased quarter over quarter, even as institutional spot volume decreased.

When a quarter presents these dynamics, it indicates that retail is retreating while institutional flow becomes relatively more significant.

It also suggests that the business model is evolving towards recurring revenue, reducing its dependence on the next trading surge. This type of winter-proofing is most evident in the subscription and services segment.

Coinbase reported $727.4 million in subscription and services revenue in Q4, with $364.1 million coming from stablecoin revenue alone. Stablecoin revenue helped mitigate the impact of reduced trading volumes.

This is undoubtedly the most misunderstood aspect of the cycle, as the market tends to equate crypto winter with inactivity.

In reality, crypto winter often signifies a shift in the crypto business towards rails, custody, and yield-like revenue streams that continue to function even when retail participation wanes.

Price can recover while participation stays thin

A crypto winter becomes more comprehensible when one distinguishes between the price of Bitcoin and the extent of participation surrounding it. Price can be sustained by a smaller group of buyers utilizing regulated wrappers, hedging instruments, and institutional balance sheets.

This can keep the price chart active while the culture of participation appears subdued. It becomes evident when significant numbers concentrate in fewer channels, and the spillover into other areas diminishes.

Coinbase’s operational notes suggest this concentration. Consumer spot trading volume was $56 billion in Q4, while institutional spot trading volume reached $215 billion.

There is no need to romanticize institutional adoption to recognize the implications. In quarters like this, the market can operate with fewer participants, but it behaves differently. It can rally based on reallocations, hedge flows, and macro positioning, without igniting the broader behaviors typically associated with a full market frenzy.

Robinhood’s quarter provides the retail perspective on this phenomenon.

Individuals are still trading, but crypto is no longer the primary outlet for that activity. Options revenue increased by 41% year over year, and event contracts emerged as a key product line that the company chose to highlight.

The desire for action has shifted towards instruments that feel more manageable, more game-like, or more understandable in a market where sentiment has soured.

This shift also clarifies why monitoring on-chain activity can be perplexing.

On-chain metrics may appear stable because the remaining users are those who actively utilize the infrastructure.

Meanwhile, the marginal participant who typically drives the emotional volume of a cycle can vanish without leaving a clear signature, as that participant’s entire interaction with crypto was mediated through apps, wrappers, and brokerage interfaces.

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Coinbase linked its disappointing quarter to a broader crypto selloff and noted how trading volumes can plummet rapidly when risk sentiment shifts.

Robinhood made a similar observation from a different angle, demonstrating that equities and options can sustain the retail engine even when crypto activity declines.

So where did retail risk migrate?

Robinhood’s figures provide three insights.

First, it shifted into listed options, with 659 million contracts traded in Q4. Second, it moved into event contracts, with 8.5 billion traded during the quarter. Third, some of it simply ceased to express itself through crypto notional on the Robinhood app, which the company reported fell 52% year over year.

Coinbase’s response indicates that retail cooled, institutional flow remained more stable, and the company relied more on stablecoin-driven revenue and other subscription and services lines to reduce its dependence on retail fluctuations.

All of this illustrates that when retail steps back, the industry recalibrates around the components that can continue to generate revenue.

However, markets can recover before retail participation does, and prices can stabilize while engagement remains selective.

The first indicators of the end of the crypto winter and the return of the crowd will be reflected in the earnings lines that track whether people are actively clicking, trading, and paying spreads again.

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