Robinhood Founder Interview: Retail Investors’ Willpower Beats All “Smart Money”

Original title: The New American Dream: Democratising Investing
Original source: Master Investor
Original translation: Azuma，Odaily Planet Daily

Editor’s note: Robinhood recently launched Robinhood Chain. With the new meme wave based on this network, it has reignited the long-dormant crypto market—so much so that some bullish investors even see it as the start of a new industry cycle.

Last week, Robinhood co-founder and CEO Vlad Tenev joined the Master Investor podcast. On the show, Vlad Tenev laid out Robinhood’s history and path to success. He talked about memes stocks, meme tokens, and also looked ahead to the value of asset tokenization and investing in private equity markets, emphasizing that “retail investors are the real smart money.”

Below is the full transcript of Vlad Tenev’s conversation on the Master Investor podcast (with certain edits for smoother reading):

Opening small talk

Host: Welcome to the Master Investor podcast. I’m the host, Wilfred Frost. In this show, we’ll sit down with some of the world’s most successful investors, business leaders, and political figures—sharing the experiences and thinking behind their success, with the goal of giving you more investment insights.

Today’s guest is Vlad Tenev, co-founder, Chairman, and CEO of Robinhood. Robinhood is a financial trading app that has truly helped popularize commission-free trading, and on top of that, brought many innovations to the industry.

Robinhood was founded in 2013, and completed its IPO in July 2021, when its market cap was about $32 billion. However, less than a year later, in 2022, during an overall market pullback, the company’s share price fell by around 80% at one point, and its market cap shrank to about $6 billion. And now, Robinhood has come roaring back—its market cap is close to $100 billion, currently a little above $90 billion, and the platform’s assets under custody have reached $380 billion.

They’re back—and stronger than ever. We’re very happy to welcome Robinhood CEO Vlad Tenev to Master Investor.

Vlad Tenev: I really like this whole trip down memory lane.

Host: Which part do you enjoy more—the stretch going up the whole time, or…?

Vlad Tenev: Probably right now (laughs). Yes, it’s only now that things are getting really interesting.

Backstory: The big 2022 correction

Host: Let’s start with the big correction back then. This isn’t just Robinhood’s history—it’s also the market’s history.

You have clear insight into the behavior of almost all traders, especially retail traders. So before that market correction—and before Robinhood’s own stock price was hit too—had you already seen signs of a bubble from your customers’ trading activity?

Vlad Tenev: Yes. During the pandemic, I personally did have doubts, though I wouldn’t directly call it “a bubble.”

If you remember, in 2020, the U.S. government started printing money at a large scale. We directly sent fiscal stimulus checks (Stimulus Checks) to households. But at the same time, when you look at the various indicators forecasting inflation levels, nobody thought inflation would rise meaningfully.

For example, the long-term inflation expectations reflected in the 10-year U.S. Treasury yield were roughly still around 2%. I remember thinking: how is that possible? The government keeps printing money, but inflation doesn’t go up.

The government didn’t invent a Perpetual Motion Machine. It can’t violate economic laws. So at some point, a certain assumption will break. For me personally, everything that happened later wasn’t surprising at all—though for the overall market, it might still have been a surprise.

By late 2021, inflation started to rise noticeably, eventually hitting new highs in decades—higher than any period in the past 30 years. And when you see inflation jump from near zero to 9% and 10%, you inevitably get a policy response—rate hikes and tighter monetary policy.

In my view, that was almost inevitable and entirely foreseeable.

Host: So can we simplify it as: the real driver of the market correction was the high inflation and the rate hikes that followed? Or was the market already showing signs of overvaluation before that?

I’m mainly referring to the Meme Stock boom. If we look back, should we have already realized that these companies weren’t generating profits, but their stock prices doubled in a very short time?

Vlad Tenev: I think these things are fundamentally interconnected.

If you look at the timeline, the most famous Meme Stock cycle happened in January 2021—just weeks after the U.S. rolled out a round of large-scale fiscal stimulus. We can see this clearly in Robinhood’s data, too.

Every time stimulus checks were issued by the government, just days or weeks later you’d see a huge influx of funds into the market. If you look back at Robinhood’s big growth during the pandemic, there were a few key reasons.

First, there was almost nowhere to spend money. Virtually all offline activities shut down. People stayed at home, so various digital activities—including investing in the stock market—became open options.

Second, people had more time. They could learn about investing, follow YouTube influencers, and watch various financial content creators.

Also, interest rates had dropped to zero. If you remember, in 2019 the Fed was still raising rates and the federal funds rate had risen to around over 2%. But after the COVID outbreak in 2020, the Fed rapidly cut rates back to zero.

On top of a zero-rate base, you then had multiple rounds of fiscal stimulus. All these factors together pushed the stock market higher.

Of course, in March 2020, the U.S. stock market did experience a sharp sell-off. But that was a brief crash, followed quickly by a classic V-shaped recovery. Without such rapid, large-scale fiscal stimulus and loose monetary policy at the time, the final outcome could very likely have been completely different.

Host: Interesting—at the time I was working at CNBC, and our viewership jumped a lot during that period. As you said, people had nothing else to do, so naturally their attention shifted to the capital markets.

Vlad Tenev: Exactly. Everything was closed—except the market was still open.

Retail and smart money

Host: The reason I chose to enter this topic is that later I want to discuss another question: do you think today’s market has similarities to that time? But before we get into that, I want to talk about something else.

I’ve heard that compared to other institutions, your customers—largely because Robinhood is retail-focused—actually perform better in the market. In the past few weeks, we’ve interviewed many guests who have all discussed the so-called Smart Money and Dumb Money.

Now, more and more people believe that the real smart money is actually retail investors. Whether it was October 2022, April 2025, or March 2026, they have succeeded in buying at lows when the market was falling. Does this trend still exist today? Do your customers still see the market earlier than others, and are they still willing to buy when prices are cheap?

Vlad Tenev: Yes, I’ve always thought that’s the case. Many times, the so-called “smart money” may even be a bit too smart—which may not necessarily be a good thing.

Institutional investing today has become increasingly indirect and more abstract. Fund managers spend more time observing the macro environment, adjusting portfolios based on various macro indicators. Often, when they sell a stock, the reason has nothing to do with that company’s fundamentals.

For example, they might sell purely due to macro factors like tariffs. Tariffs force them to reallocate more capital, which creates what looks counterintuitive: they sell a company like Palantir—despite the fact that the company may not be affected at all by tariffs, and could even benefit.

Retail investors’ thinking is much simpler. They buy and sell stocks because they believe a specific company will do well in the future. So when faced with macro events like tariffs and interest rates, retail investors often actually show more resilience.

They care about: “How is this company run?” “Do I like its products?” “Is revenue growing?” “Are profit margins improving?” “How is the Rule of 40 performing?”…

These are still relatively professional analyses. The difference is that they won’t dump their stocks just because “the Russia-Ukraine war happened,” then rotate into fixed-income assets—the way many institutional investors do.

Does a bubble like 2022 exist in today’s stock market?

Host: Next, I want to talk specifically about Robinhood. As mentioned earlier, you completed your IPO in July 2021, and soon after, the entire capital markets entered a very difficult period.

Do you feel that you basically caught the last train? Because in the years that followed, the capital markets were not friendly to IPO deals like Robinhood’s.

Vlad Tenev: Yes. The IPO market window basically closed for several years. Because we later launched an IPO Access product, we had more firsthand visibility into the IPO market overall.

After the IPO window closed, it took a few years before a crack finally appeared. ARM and Instacart’s IPOs—these two companies can be seen as the first to reopen the market. I remember that it was around 2023, and in a way they could be seen as a sign that the market recovery was beginning in earnest.

And it wasn’t until last year that the IPO market truly reopened across the board.

Host: The reason I went around like this is that I want to ask you whether you now feel a sense of déjà vu about SpaceX’s listing—just like Robinhood back then: you managed to IPO successfully before the market closed. If you had been even a bit later, you probably wouldn’t have gotten such an opportunity, because after that the market went through two years of low momentum.

Now SpaceX has successfully listed, and people are watching to see whether all these other companies can catch up. Because OpenAI has now said they may not try to go public for the time being. Does this feel like déjà vu? And compared to back then, what’s your view on how the market is moving now?

Vlad Tenev: Right now, everyone is debating one question: “Are we in an AI bubble?”

I think what complicates this question is that many companies are investing huge amounts into AI, and at the same time, the AI industry has already formed a relatively clear business model.

These foundation model companies (Model Companies) sell Tokens to enterprise and individual users. OpenAI also has subscription revenue at a scale that’s already quite significant. So unlike many past bubbles, AI companies today have real business models and have continuing growth in revenue.

The real question is then whether those enterprises that are paying heavily for AI will gradually shift from this current phase—“willing to learn, not paying much attention to cost”—to a phase where they care more about return on investment (ROI). If they start measuring ROI strictly, will revenue from each customer continue to grow in the future—or fall instead?

On the other hand, there’s another important factor: there are still lots of enterprises that haven’t truly started using AI. Consumers are the same. For example, look at Claude Code—its user base is only on the order of tens of millions, far from hundreds of millions, let alone billions. So there’s still a very long growth runway across the entire market. And that’s why, even though there’s already real revenue today, I still feel the AI industry is in a very early stage of development.

So I think this is very different from how we used to judge IPO timing. There’s one more thing I’ve gradually realized over the years: no matter which era you’re in, you always feel like you’re standing at a very important historical moment. You always feel that what’s happening in front of you is unprecedented, as if you’re standing on the edge of some huge transformation.

But if you look back, these market cycles are actually getting shorter and shorter. For example, we just mentioned that the IPO window closed at the end of 2021, and it started reopening in 2023. If you zoom out, you’ll find it’s basically just a cycle fluctuation similar to a sinusoidal pattern.

No stage lasts forever. Even if the IPO window temporarily shuts, it doesn’t necessarily take ten years to reopen.

Host: Based on the customer behavior you’ve observed, are you seeing warning signs similar to the market correction in 2022?

Of course, SpaceX is clearly not a Meme Stock. It’s a company worth tens of trillions of dollars. But people still use it as an analogy, saying that it has been pushed to a very high valuation by the market even though its profitability is not enough, and that it might fall again in the future.

I’m not equating it with GameStop. What I mean is: have you seen any signs in your customers’ trading behavior that remind you of the periods before the market adjustments in 2020, 2021, and 2022?

Vlad Tenev: I think the companies our customers invest in today are, overwhelmingly, large businesses with real profitability and that are leading their respective industries.

You mentioned SpaceX. Besides that, there’s also Nvidia, Tesla, and other chip companies. Recently, the whole chip industry has performed quite well, and our customers are very interested in it, too.

So I think the biggest difference between today and 2020 and 2021 is that back then there was an investment sentiment I call “Nostalgia.” Many of Robinhood’s users were Millennials, and at the time they invested in companies that, in their view, were being unfairly pressured by pandemic-era policies—retailers like GameStop, cinema chains, airlines, car rental companies, and so on. Even in the most optimistic scenario, it’s hard to say those businesses are at the frontier of technological innovation. In fact, due to the market environment, COVID, and the trends of online entertainment and streaming, they were to some extent industries that were being disrupted by the times.

Today is completely different. Most of what our customers invest in are innovative companies that are actively disrupting their industries—they are already on the front line of their sector’s development. Of course, there’s room to debate P/E ratios and other valuation metrics, but I think there’s almost no controversy about this: these companies are indeed changing the world.

The path to success as seen by founders

Host: Let’s bring the topic back to Robinhood. Before we talk about Robinhood today and where it might go in the future, I want to look back first.

When you look back, what was the fundamental reason Robinhood was able to quickly open the market and win user recognition in the early days? I know zero-commission trading is definitely one factor.

Vlad Tenev: I think there were three factors working together that truly helped Robinhood’s product resonate widely.

First, as you mentioned, commission-free trading. At the time, other brokers charged $7 to $10 per trade in fees, while ours was completely free. That didn’t just help us attract a new set of users—mainly younger people who didn’t even have $1,000 or $2,000 to start investing.

Later, we also attracted a lot of active traders to the platform. For these active traders, even if our platform had some gaps in features or tools compared with more professional brokerages, they were still willing to use Robinhood. Because economically, the value created by zero commission was so huge. So at least from a business model standpoint, we won the competition.

Second. Beyond being the first to introduce zero-commission trading and building the business model that became widely adopted across the industry, we also pushed mobile trading early. Robinhood can be said to have been a leader in the brokerage industry’s shift to mobile. Before Robinhood came along, some brokers had mobile apps, but mobile was more like an add-on—a supplement after the fact.

We bet that mobile internet would definitely be the future, and that people would mainly use their phones to manage their financial lives. Not just because phones are more portable, but because mobile has many real advantages in itself. So from the very beginning of product design, we built around mobile. I believe Robinhood truly created the mobile brokerage industry and helped it become the mainstream form in the market—and Robinhood has always been a leader in that space.

Third—and this is very important in my view—is the set of values that Robinhood represents. If we go back to the 2008 global financial crisis, many of our users were at an important stage in their lives then. I graduated from college in 2008 and then entered graduate school. In my first month of graduate school, my co-founder Baiju had just started working.

Right then, Lehman Brothers collapsed. The global financial crisis officially erupted. For my generation, the biggest feeling we had about the financial crisis was this: it was a problem manufactured by the financial industry itself, yet the entire society ultimately paid the price.

Financial institutions made wrong decisions. In a sense, the costs caused by the crisis were shared by society as a whole, but the people who truly should have been held responsible were almost never punished. And the gains from the economic recovery after the crisis flowed right back to the financial industry itself—back to those who already had assets, and in a sense, the “insiders,” the wealthiest 1%.

Later, this gave rise to the Occupy Wall Street movement, and it also shaped widespread disillusionment among an entire generation of young people in the early 2010s. So I think people back then were desperately in need of a new solution.

And that’s exactly what Robinhood offered. It told people that instead of abandoning the entire system, they could genuinely participate in it. That’s why I think Robinhood’s idea itself has enormous power—it truly represents ownership. A future that only belongs to a small number of people would be an extremely fragile future. We want every person to be able to own assets. We believe that broad asset ownership is an essential foundation for a free, stable, and prosperous society.

I think this idea truly moved a lot of people. And it was precisely these three factors working together that ultimately made Robinhood the fastest-growing brokerage at the time.

Are there new retail investors still entering the market?

Host: You just mentioned that you didn’t just take market share from other brokers—you also attracted some users who were already trading on other platforms. But I think even more importantly, you actually created a group of new investors who would never have entered the stock market in the first place.

So what do you think about the current penetration rate of the U.S. market? Not just Robinhood, but the entire retail investing market. Beyond generational change, are there still many people who will enter the stock market in the future? Or is it that the past decade largely already consumed the most easily reachable users?

Vlad Tenev: I think the space is still very large. Currently, the participation rate in the U.S. stock market is about 65%, meaning about two-thirds of people hold stock assets.

If you look back at history, I remember that before the Acquired podcast, they did an episode about Vanguard. They drew a curve showing how U.S. stock participation rates evolved over time, and there were a few very important inflection points.

The first inflection point was when U.S. companies massively rolled out 401(k) employer retirement plans. That raised participation from around 20% to close to 50%. Then after the global financial crisis, that proportion stalled for a period of time. Then in that chart, you can see another important node—Robinhood’s emergence. Robinhood pushed participation up from over 50% to now over 60%, and it’s still rising.

Now the question is: can we raise this figure from 60% to 90%—or even approach 100% eventually? Of course, getting to 100% might be difficult in reality. There will always be some people who don’t participate in investing. But I believe reaching 90% or more is absolutely possible.

To do that, the key is that there are still many people who don’t qualify for employer-provided 401(k) plans. So can we give them brokerage accounts? Help them start investing? Even start investing from childhood? That’s also why we’re very excited to partner with BNY Mellon to become the only initial broker and trustee for the U.S. Trump Accounts program.

This program will open a brokerage account for every baby born in the United States. The funds will start investing at birth into a highly diversified portfolio of public companies. I think this could just be the beginning. In the future, it could truly push U.S. stock market participation to above 90%.

Robinhood has also recently expanded into the UK. Compared with the U.S., the UK is even a bit more “behind.” Right now, only about one-sixth of people in the UK hold stock assets, and there’s no reason to think that can’t change.

If you look at the UK brokerage industry as a whole, you’ll find that many big traditional brokerages still haven’t implemented zero-commission trading. Unlike the U.S., these full-service brokers in the UK haven’t truly adopted that business model yet—but that’s just a matter of time.

In the long run, they’ll eventually have to move toward zero commissions. The industry transformation that’s truly unique to the UK market hasn’t happened yet.

Robinhood Chain and asset tokenization

Host: Next, let’s talk about crypto. Robinhood has just launched the Robinhood Chain public mainnet. For those who don’t know, what does that actually mean?

Vlad Tenev: It’s essentially a blockchain—more precisely, a Layer 2 network built on Ethereum, with Arbitrum technology at the base layer. Our goal is to make it the best blockchain for real-world assets (Real World Assets, RWA).

For a long time, when people talk about crypto, they usually think about Bitcoin and meme coins—but those assets don’t actually represent anything in the real world.

Over the past year and more, Robinhood’s entire crypto strategy has been centered on one question: can we truly use blockchain technology to turn it into infrastructure for real-world assets? And then make assets that have real value and real use cases able to run on blockchains as well. At the same time, make it easier for more people around the world to own these assets.

So alongside launching Robinhood Chain, we’ve also been pushing our asset tokenization strategy. Last year, at a launch event in Cannes, France, we officially unveiled Robinhood’s long-term asset tokenization roadmap.

At the time, we asked: what is the real value of asset tokenization? My answer is: it’s similar to stablecoins.

Stablecoins allow people across hundreds of countries and regions to access dollars conveniently. In the past, for many people in many countries, getting dollars was very difficult. Stablecoins solve that problem. In the future, asset tokenization will play a similar role: it will bring the value of U.S. stocks to the world, allowing people in countries where the financial system isn’t as mature as in the UK or the U.S. to hold U.S. stocks more conveniently.

So on Robinhood Chain, we will introduce Stock Tokens. These stock tokens will go live in more than 120 countries and regions. Users can use their own non-custodial wallet (Non-custodial Wallet), or use the Robinhood Wallet—our own wallet product.

We want to provide an excellent user experience so users can trade and exchange stock tokens conveniently. With these tokens, users can get investment exposure to the entire U.S. publicly listed stock market. In the first phase, we will support about 2,000 publicly listed U.S. stocks, with stock tokens enabling 24/7 trading.

Additionally, they have portability. That means users no longer rely entirely on a single brokerage as the counterparty. As long as the blockchain network continues to run, these tokens can be freely transferred and exchanged.

Host: These stock tokens—are they backed by real assets (Real-backed), or are they just synthetic assets (Synthetic)? Will you always truly hold the underlying assets? Do you need permission from the asset issuers?

Vlad Tenev: We will always stick to one-to-one real-asset backing. Even if something happens to Robinhood itself in the future, the asset exposure they hold will still be safe. And with this relaunch of the stock token product, we also further clarified the product architecture.

Host: What I really want to ask is: if you insist on one-to-one real-asset backing, does a company always have the right to prevent its stock from being tokenized? Especially for private companies that are not publicly listed.

For example, suppose Robinhood itself buys some shares of Stripe in the secondary private market. If those shares come from employee stock ownership plans, can Stripe forbid those shares from being tokenized in the future through its corporate charter? Or if you legally obtain the shares, will you still push to do this even if legal disputes may arise in the process?

Vlad Tenev: Yes. In the past, we did experience some controversies like this—though not with Stripe, but with other companies.

In fact, we currently have two different models. One is the stock tokens we just discussed. The other is Robinhood Ventures, which is being launched in the U.S. now.

So far, this business has been doing quite well. Its core objective is to think about how to use traditional finance tools (TradFi) to give ordinary investors investment opportunities in these high-quality private enterprises.

Ultimately, we designed a closed-end fund structure. You can think of it as a publicly traded venture capital firm.

It invests in a basket of private enterprise assets. Currently, the fund has already invested in several companies including Stripe, OpenAI, SpaceX (before IPO), the UK fintech company Revolut, and other excellent businesses.

One of our important principles has never changed: we respect the intent of the issuer. Of course, we always put shareholders’ interests first. We firmly believe that retail investors should also have the opportunity to invest in these excellent private enterprises. And we also believe that in the long run, issuers will ultimately accept that this will become a widespread phenomenon.

Can AI change the way retail investors trade?

Host: You’ve mentioned on many podcasts that you’re using AI to enhance the user experience. And you emphasized that you want core capabilities to be developed in-house rather than relying entirely on external sources, because only then can you truly build competitive advantage.

If Robinhood’s rise came from zero-commission trading and being early on the mobile strategy, then in the next five years—based on your view—how much additional market share will the brokerages that truly apply AI be able to gain?

Vlad Tenev: I’ve always had a viewpoint: in the future, humans will always trade themselves.

At the very beginning of my career, I worked on high-frequency trading, which can be considered one of the earliest application scenarios for AI. Back then, people didn’t even call it AI; they called it machine learning (Machine Learning).

At that time, high-frequency trading firms were already buying GPUs. We were even among the first batches of people to use NVIDIA CUDA-accelerated cards. NVIDIA released the first Tesla acceleration cards around 2010. I remember that when I was doing high-frequency trading, we were one of the first to get those products.

We used GPUs to compute the prices of various securities and to develop trading algorithms. So the financial market has already been electronic for a long time. Quant funds kept developing increasingly complex trading strategies and putting them into the market.

Before Robinhood showed up, many people even thought high-frequency trading would eventually swallow up the whole market. But then Robinhood appeared, and retail trading came roaring back.

Retail came back to the market, and humans started trading themselves again. So I believe there will always be a balance between the two.

The really interesting question is whether we can open up the strategies and tools that originally only top hedge funds and high-frequency trading firms could use, to ordinary investors.

These tools and the way ordinary retail investors trade today are completely different. But can we help ordinary people use these capabilities easily without needing a computer science degree? I think that’s the truly exciting part.

In my view, it’s more like democratizing software engineering capabilities—not just stock trading.

Host: So will this eventually make the whole market more efficient (Perfectly Efficient)?

Vlad Tenev: I don’t think so. Of course, there are already many algorithms that do automatic trading. But the one making decisions is still a human.

Host: But if in the future every retail investor has the same AI and only needs to click “enable automated trading”…

Vlad Tenev: If every retail investor uses the same AI Agent, then the advantage that comes from using it will likely gradually disappear. The incremental value it can create will keep getting lower.

Host: So does that mean human traders on the other side will get opportunities again?

Vlad Tenev: Exactly. The financial market is inherently an extremely complex, dynamic, and chaotic system. So I think humans and AI will ultimately form a kind of balance.

Final investment advice

Host: We’re about out of time. As is tradition for the show, I’d like to ask you one final question. For our listeners, what’s the most important investment advice you’d give?

Vlad Tenev: I have to answer this carefully (laughs). The reason I’ve worked so hard to push private equity markets is that many of the companies we just talked about—such as SpaceX, OpenAI, and Anthropic—are either already at the trillion-dollar valuation stage when they go public, or very likely will only go public at valuations in the tens of trillions.

So we’re in a very delicate stage right now. More and more value creation is being shared by fewer and fewer wealthy insiders—and therefore these people are getting richer and richer. Back in the past, when ordinary investors could buy stock in Microsoft or Amazon when their valuations were only a few billion dollars, and then get 1,000x or even 10,000x returns in the public market—those kinds of opportunities are becoming increasingly rare.

That’s why we’ve always wanted to make it easier for companies to enter public markets. And we’ve been pushing related work. Of course, there’s a possibility that even if we succeed, reality might still not change.

Because companies can easily raise financing from private markets, and in the future private financing may even become easier. In that case, they might still wait until their valuations reach the tens of trillions before going public.

So we have to open the doors of the private equity market. That’s also why I’m so enthusiastic about Robinhood Ventures. I believe this is Robinhood’s next truly important crusade.

Our mission is to make private equity markets into Private Markets—so that ordinary investors can participate as early as possible in the growth of these businesses, with robust safety safeguards and comprehensive risk control mechanisms.

Because the earlier-stage a company is, the higher the risk truly is—but at the same time, the potential returns are the biggest.

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