Robinhood Markets (HOOD) experienced a severe selloff on Monday, February 3, 2026, with its stock price plunging 9.7% to close at $89.85. This made it the worst performer in the S&P 500 index, capping a rough start to the year that has seen shares decline 21% year-to-date. This marks a sharp reversal from 2025, when the stock surged more than 200%.
The primary catalyst for the decline was Bitcoin's price action. The cryptocurrency hit a 10-month low of $74,553 in early morning trading, spooking digital-asset traders following Kevin Warsh's nomination to lead the Federal Reserve. Bitcoin later recovered to around $78,500. Given that Robinhood offers trading in over 50 crypto tokens and derives a substantial portion of its revenue from transaction-based crypto trading, falling prices and reduced volume directly impact its financial performance. The stock has historically shown a strong correlation with Bitcoin's value.
Seasonal factors also contributed to the pressure. Analysts at Piper Sandler noted that the conclusion of the football season poses a headwind for Robinhood's rapidly growing prediction markets product line. Football drove almost half of the total volume on Kalshi, Robinhood's main prediction markets partner, since August. With the season ending, investors are concerned about a potential revenue gap.
Despite the selloff, Piper Sandler analyst Patrick Moley maintains an Overweight rating with a $155 price target, representing over 70% upside from current levels. Moley cites upcoming catalysts including the Winter Olympics, the NCAA basketball tournament in March, and the potential passage of the CLARITY Act—a crypto market structure bill advanced by the Senate Agriculture Committee. Further ahead, the 2026 FIFA World Cup and midterm elections are expected to drive prediction market volume.
Technically, the stock appears oversold. Its 14-day Relative Strength Index (RSI) sits at about 23, firmly in oversold territory, which historically has preceded near-term rebounds. The Wall Street consensus rating remains at Moderate Buy with a mean price target of approximately $151.
In other developments, Robinhood launched a stocks and shares Individual Savings Account (ISA) in the United Kingdom on Monday, offering British customers access to roughly 5,000 U.S.-listed stocks and ADRs with no fees or commissions. This expansion is seen as a move to diversify revenue streams beyond crypto-dependent trading.
Investors are now looking ahead to Robinhood's Q4 2025 earnings report, scheduled for release after market hours on February 10, 2026.
