Robinhood vs. eToro: One Platform Builds, the Other Drifts

In 2025, retail brokerage is not a feature — it's a fight for infrastructure dominance.

In 2025, retail brokerage is not a feature — it's a fight for infrastructure dominance. Robinhood and eToro may appear to play in the same sandbox, but their business models, product strategies, and market trajectories are fundamentally misaligned.

Robinhood is building a financial OS for the next generation. eToro is still selling tools for a previous cycle.

Robinhood: The Business, Not the Brand

Strip away the meme-stock stigma and what’s left is a financial platform with:

• $232 billion in customer assets

• 25.9 million funded accounts

• $1.7 billion in EBITDA (TTM)

• A product stack that monetizes behavior, not just transactions

Monetization Stack:

1. Interest Income (Float)

$16B+ in customer cash, earning spread. This is now Robinhood’s largest revenue line — capital-light, scalable, and anti-cyclical.

1. Options Trading

High-frequency, high-margin, culturally sticky. Options generate disproportionate revenue and user retention.

1. Gold Subscriptions

$5/month to unlock higher margin, deeper data, and enhanced cash yields. Over 1.5M users, growing ~70% YoY.

1. IRAs + Retirement Products

$16B+ in retirement assets. This is Schwab’s model, rebuilt for mobile-native investors.

1. Card & Spending

Debit card with direct deposit, 3.9% yield on uninvested cash (Gold). Robinhood earns on spend, hold, and lend.

This is not a trading app.
It’s a vertically-integrated monetization engine where each feature reinforces another — asset retention feeds interest income, Gold feeds margin, margin feeds trading, trading feeds option volumes.

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eToro: Global Reach, Shallow Yield

eToro’s topline sounds strong:

• $824M in 2024 revenue

• $192M in net profit

• 3.5M funded accounts

• Users in 100+ countries

But that’s where it stops.

eToro's Model:

• Spreads + overnight fees on trades

• Social copy trading mechanics

• Revenue linked heavily to crypto volumes

• No penetration in U.S. equity or options market

• No infrastructure layer (cards, retirement, margin, custodial)

The “social trading” model worked in 2017–2020. But that community dynamic is now decentralized: Reddit, Discord, Telegram, and Threads handle what eToro was designed to own.

There is no defensible moat, no unique monetization channel, and no real asset capture.

ARK Invest bought in post-IPO. But the position was small (~$9.4M), speculative, and hasn’t scaled. eToro hasn’t announced U.S. expansion, hasn’t launched any new monetizable product, and remains structurally outside the most profitable markets in brokerage.

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Strategic Divergence

While eToro sits still, Robinhood is buying infrastructure:

• TPR Acquisition — custodial tech for RIAs, pushing toward managed assets

• WonderFi (Canada) — a $250M crypto brokerage buyout for regulated expansion

• Crypto rollout in Europe, tokenized securities pipeline for E.U. clients

• Options volume share growing — Robinhood has made options the entry point for a generation of investors

Even Coinbase has entered infrastructure-buying mode — $2.9B for Deribit to dominate crypto options.

Robinhood is executing that same logic — in traditional finance.

Robinhood vs. IBKR & Schwab: The Valuation Premium

Robinhood trades at a premium because of growth velocity + behavioral lock-in.

• IBKR and Schwab manage more assets, but serve an older, slower-moving clientele

• Robinhood’s user base is younger, more option-driven, and has higher frequency

• The market is pricing in not just revenue — but lifetime value expansion + product density per user

In short: IBKR monetizes assets. Robinhood monetizes behavior.

Robinhood vs. eToro vs. IBKR – What the Valuation Actually Means

Robinhood has climbed 52% YTD and now trades at ~13x forward sales.

That’s aggressive for a brokerage. But Robinhood isn’t just a brokerage anymore.

It’s building infrastructure: cards, IRAs, crypto, options, and even custody. It earns like a fintech bank, retains like a broker, and grows like a SaaS company. That’s what gives it multiple expansion.

eToro, by contrast, hasn’t built the second layer.

It has social mechanics — but no platform stickiness. Its main monetization channel is still crypto-driven trading spreads. No U.S. options, no retirement product, no card. Its public listing didn’t fix the business model. Until it expands into the U.S. with real product depth, it's a nice trading frontend — not an investable platform.

IBKR is in another league.

It’s profitable, has $400B+ AUM, and grows slowly — but steadily. Revenue per client is in the thousands. But it’s not a growth story anymore. It’s infrastructure for serious capital. If you want a dividend compounder with no excitement — IBKR is the cleanest play.

What’s Priced In?

• Robinhood is being valued like a platform, not a broker.

• eToro is priced like a bet — and right now, it’s a passive one.

• IBKR is priced like a mature compounder — lower risk, lower upside.

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Your Edge

If you're long Robinhood now, you’re betting:

• That younger investors don’t churn as they age.

• That IRA + card products retain capital, not just flows.

• That Gold subscriptions scale into Schwab territory.

Upside exists. But it’s already a $55B company — this isn’t $8/share HOOD anymore.

If you're looking for return asymmetry, you either wait for a correction or scale in slowly.
If you want certainty, Robinhood isn't for you — IBKR is.