Conversation with Robinhood CEO: Retail investors are the real smart money; asset tokenization is the future; AI will not replace human traders

This article is from: Master Investor

Translated by: Azuma, Odaily Planet Daily

Editor’s Note: Robinhood recently launched Robinhood Chain. A new wave of Meme mania, built on this network, has reignited the long-dormant crypto market—so much so that some optimistic investors even view it as the start of another industry cycle.

Last week, Robinhood founder and CEO Vlad Tenev took part in the Master Investor podcast. In the episode, Vlad Tenev laid out Robinhood’s development history and success path. Vlad Tenev discussed everything from Meme stocks to Meme tokens, and also looked ahead to the investment value of asset tokenization and the private equity market—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 some omissions for smoother reading), compiled by Odaily Planet Daily.

Opening small talk

Host: Welcome to the Master Investor podcast. I’m your host, Wilfred Frost. In this show, we’ll have conversations with some of the most successful investors, business leaders, and political figures around the world—sharing the experiences and thinking behind their success, and hoping to help you gain more investment insights.

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

Robinhood was founded in 2013, and it completed its IPO in July 2021, when its market value was roughly $32 billion. However, less than a year later, in 2022, during the market’s overall pullback, the company’s stock price fell by as much as about 80% at one point, and its market cap shrank to about $6 billion. Today, however, Robinhood has bounced back—its market cap is close to $100 billion, currently a bit above $90 billion, and the platform’s assets under custody have reached $380 billion.

They’re back—and stronger than ever. I’m really happy to welcome Robinhood CEO Vlad Tenev to Master Investor.

Vlad Tenev: I really like this walk down memory lane.

Host: Which part do you enjoy more? Is it when things were going up all the way, or…?

Vlad Tenev: Probably right now (laughs). Yes, it’s exactly the most interesting time.

A look back: the big 2022 drawdown

Host: Let’s talk about the big drawdown back then. This isn’t just Robinhood’s development history—it’s also the market’s development history as a whole.

You have clear insight into the behavior of nearly all traders, especially retail traders. So before that market drawdown—before even Robinhood’s own stock price was hit—had you already seen signs of a bubble from customer trading behavior?

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

If you remember, in 2020, the U.S. government started printing a large amount of money. We issued stimulus checks directly to households. But at the same time, when you look at the indicators that predict inflation levels back then, nobody thought inflation would rise meaningfully.

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

The government didn’t invent a Perpetual Motion Machine—it can’t violate economic laws. So eventually some assumption would have to break. From my personal perspective, everything that happened later wasn’t entirely surprising, even if it may have been a surprise for the entire market.

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

In my view, this was almost unavoidable and completely predictable.

Host: So should we think of it simply as—what really caused the market drawdown was the subsequent high inflation and rate hikes? Or, before that, had the market already shown signs of overvaluation?

I’m mainly referring to the Meme Stock craze. If we look back in hindsight, weren’t we supposed to realize that those companies didn’t have earnings, yet their stock prices doubled in a very short period of time?

Vlad Tenev: I think all of these things are inherently interconnected.

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

Whenever the government issued stimulus checks, within just a few days or weeks, you’d see a huge influx of funds into the market. If you look back at Robinhood’s massive growth during the pandemic period, there are a few important reasons.

First, people had nowhere to spend money. Nearly all offline activities were shut down. Everyone stayed at home, so various digital activities—including investing in the stock market—became one of the remaining options that was still open.

Second, people had more time. They could learn about investing, follow YouTube personalities, and various finance content creators.

Also, at the time interest rates fell to zero. If you remember, in 2019 the Fed kept raising rates, and the federal funds rate at one point rose to around 2% or higher. But when the COVID-19 pandemic hit in 2020, the Fed quickly cut rates back to zero.

On top of that, there were multiple rounds of fiscal stimulus. All these factors together were pushing the stock market upward.

Of course, in March 2020, the U.S. stock market did experience a dramatic drop. But that was a very short-lived crash, followed quickly by a classic V-shaped recovery. If the large-scale fiscal stimulus and loose monetary policy hadn’t come so quickly, the end result could very well have been completely different.

Host: That’s fascinating. I happened to be working at CNBC then, and our viewership jumped a lot during that period. As you said, there wasn’t much else for people to do, so their attention naturally shifted to the capital markets.

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

Retail vs. smart money

Host: I’m getting into this topic because later I want to discuss another question—whether you think today’s market has similarities to that time. But before we get to that, I also want to talk about something else.

I heard that compared with other institutions, your clients—largely because Robinhood is retail-heavy—have actually performed better in the market. Over the past few weeks, we’ve interviewed many guests, and they’ve all brought up the so-called “smart money” and “dumb money.”

Now more and more people are starting to believe that the real “smart money” is actually retail investors. No matter whether in October 2022, April 2025, or March 2026, they succeeded in buying at low prices when the market dropped. Does that pattern still exist? Are your clients still able to see the market earlier than others, and willing to buy when prices are cheap?

Vlad Tenev: Yes, I’ve always believed that. Often, what people call “smart money” might be a little too smart for its own good, which may not be a good thing.

Institutional investing has become increasingly indirect and abstract. Fund managers observe the macro environment and adjust portfolios based on various macro indicators. Many times, when they sell a stock, it has little to do with the company’s fundamentals.

For example, they may choose to sell simply because of macro factors like tariffs. Tariffs force them to reallocate more capital, which creates a seemingly counterintuitive situation: they sell a company like Palantir, even though that company might not be affected by tariffs at all—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 facing macro events like tariffs and interest rates, retail often shows more resilience.

They focus on: how is the company run, do I like its product, are revenues growing, are profit margins improving, how is the “Rule of 40” performance…

These are still fairly professional analyses. But they won’t just dump their entire stock portfolio because “the Russia-Ukraine conflict happened,” then rotate into fixed-income assets—while that’s exactly what many institutional investors do.

Is there a bubble like 2022 in today’s stock market?

Host: Next, I want to get specific about Robinhood. As you mentioned earlier, you completed your IPO in July 2021. And not long after that, the entire capital market entered a very difficult period.

Do you feel that you basically caught the last train? Because in the years after, the capital markets haven’t been friendly to IPO trading like Robinhood’s.

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

After the IPO window closed, it took a few years before a crack finally appeared. The ARM and Instacart IPOs—two companies that really reopened the market early on. I remember it was around 2023; in a sense, they could be seen as signs that the market was starting to recover more broadly.

And it wasn’t until last year that the IPO market fully reopened.

Host: The reason I went around in circles is that I want to ask: do you now have a sense of deja vu about SpaceX’s listing? Just like Robinhood back then—getting it done successfully before the market closed. If it had been a bit later, you probably wouldn’t have had the same opportunity, because then the market went through two years of stagnation.

Now SpaceX has already successfully listed, and people are watching to see if all these other companies can catch up. Because OpenAI has said it may not try to list for now. Does this feel a bit like déjà vu? How do you see the market dynamics today compared to back then?

Vlad Tenev: Everyone is now discussing a question: “Are we in an AI bubble?”

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

These foundational model companies sell Tokens to enterprise and individual customers. OpenAI also has a subscription business that has reached quite a substantial scale. So, unlike many previous bubbles, today’s AI companies have real business models and continuously growing revenue.

The real question is: will those enterprises that are paying heavily for AI gradually move from a stage where they are “willing to learn and not too focused on cost” to a stage where they care more about return on investment (ROI)? If they start measuring ROI strictly, will revenue from each customer keep growing in the future—or actually decline?

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

So I think it’s not the same logic as judging IPO timing back then. There’s another thing I gradually realized over the years: no matter which era you’re in, you always feel like you’re standing at an extremely important historical turning point, that what’s happening right now is unprecedented, and that you’re on the edge of some massive transformation.

But when you look back, these market cycles actually become shorter and shorter. For example, as we just mentioned, the IPO window closed at the end of 2021 and began reopening in 2023. If you zoom out and look at a longer timeline, you’ll find it’s essentially just sinusoidal cycle fluctuations.

No phase is permanent. Even if an IPO window closes temporarily, it doesn’t necessarily mean it will take ten years to reopen.

Host: From the customer behavior you’ve observed, do you see any warning signals similar to the 2022 market drawdown?

Of course, SpaceX is obviously not a Meme Stock. It’s a company worth tens of trillions in market value. But people still draw comparisons, saying it’s been pushed to an extremely high valuation even though its profitability isn’t yet strong enough—and it might fall again in the future.

I’m not trying to compare it to GameStop. What I mean is: have you seen anything in customer trading behavior that makes you think of the signs before the market adjustments in 2020, 2021, and 2022?

Vlad Tenev: I think the companies our customers invest in today are overwhelmingly large enterprises that have real profitability and are at the forefront of their respective industries.

You mentioned SpaceX. Besides that, there’s also Nvidia, Tesla, and other chip companies. Recently, the entire semiconductor industry has been performing quite well, and our customers are very interested in that 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 are Millennials. At that time, they invested in companies they felt were being “unfairly suppressed” by pandemic-era policies—like retail businesses such as GameStop, cinema chains, airlines, car rental companies, and so on. Even in the most optimistic case, it’s hard to argue that these businesses were at the very front of technological innovation. In fact, influenced by the market environment, the COVID-19 pandemic, and trends like online entertainment and streaming, they were in some ways industries being overturned by the times.

Today is totally different. Most of what our customers invest in are innovative companies that are actively disrupting industries and are themselves at the forefront of their industries’ development. Of course, you can debate valuation metrics like P/E and other valuation indicators—but I think there’s basically no dispute that these companies are indeed changing the world.

The path to success, as seen by the founder

Host: Let’s bring the topic back to Robinhood. Before we talk about today’s Robinhood and where it’s headed in the future, I’d like to look back.

Looking back, what do you think was the fundamental reason Robinhood was able to quickly open the market and earn user recognition in its early days? I know commission-free trading is definitely one reason.

Vlad Tenev: I think Robinhood’s product resonated widely because three factors worked together.

First, as you mentioned, Commission-free Trading. Back then, other brokerages charged $7 to $10 per trade in fees, while ours was completely free. So we didn’t just attract a new group of users—mostly younger people who originally didn’t have $1,000 to $2,000 to start investing. Later, we also attracted a lot of active traders to the platform. For these active traders, if they trade 100 times or even 1,000 times a month, even if our platform had some shortcomings in terms of functionality or tools compared with other professional brokerages, they still preferred using Robinhood. Because economically, the value created by zero commission is just too big. So at least in terms of business model, we won the competition.

Second. Besides being the first to roll out commission-free trading and establishing the business model that’s now widely adopted across the industry, we were also the first to push mobile trading. Robinhood can be said to have led the brokerage industry’s move toward mobile. Before Robinhood appeared, although some brokerages did release mobile apps, mobile was just a subsidiary product—an afterthought or supplement.

We bet that mobile internet would definitely become the future, and that people would primarily manage their financial lives through their phones. Not only because phones are more portable, but because the mobile experience itself has many practical advantages. So from the very beginning of product design, we built around mobile. I believe Robinhood truly created the Mobile Brokerage industry and helped make it the mainstream form in the market. And Robinhood has always been a leader in this space.

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

Around that time, Lehman Brothers collapsed. The global financial crisis officially broke out. For our generation, the biggest feeling about the financial crisis was: this was a problem created by the financial industry itself, yet the entire society ended up paying the cost.

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 should have been held responsible were almost never punished. And then the gains from the economic recovery after the crisis flowed back to the financial industry itself—to those who already had assets—and, in a sense, to insiders, the richest 1%.

This later gave rise to the Occupy Wall Street movement and shaped a widespread sense of disillusionment among an entire generation of young people in the early 2010s. So I think at the time, people desperately needed a new solution.

And Robinhood offered exactly that kind of solution. It told everyone that instead of abandoning the entire system completely, you should truly participate in it. That’s why I believe Robinhood’s idea itself has tremendous power—it truly represents Ownership. A future that belongs only to a few people would be an extremely fragile future. We want everyone 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 really moved a lot of people. And it was the combined effect of these three factors that ultimately made Robinhood the fastest-growing brokerage at the time.

Are there still new stock investors in the market?

Host: You mentioned earlier that you not only took market share from other brokerages, but also attracted some users who were already trading on other platforms. But I think more importantly, you actually created a batch of entirely new investors who previously would never have entered the stock market at all.

So how do you view U.S. market penetration today? Not just Robinhood—rather, the entire retail investing market. Besides generational change, will there still be many more people in the U.S. who enter the stock market in the future? Or did the development of the past decade basically consume most of the easiest-to-reach users?

Vlad Tenev: I believe there is still a huge amount of room. Currently, participation in the U.S. stock market is about 65%, meaning roughly two-thirds of people hold stock assets.

If you look back at history, I remember that before the podcast Acquired, they did an episode about Vanguard, where they drew a curve showing the evolution of U.S. stock market participation rates. There are a few very important inflection points.

The first inflection point is the widespread adoption by U.S. companies of 401(k) corporate retirement plans, which raised participation from roughly 20% to nearly 50%. Then after the global financial crisis, this ratio stalled for a period of time.

Then on that chart you’d see another key milestone—Robinhood’s birth. Robinhood pushed participation from over 50% to today’s over 60%, and it’s still continuing to rise.

Now the question is: can we raise this number from 60% to 90%—or eventually close to 100%? Of course, getting to 100% may be very difficult, because there will always be some people who don’t invest. But I think reaching above 90% is absolutely possible.

To do that, the key is that many people still don’t qualify to enjoy the 401(k) plans provided by companies. So can we give them securities accounts? Get them started investing? Even start investing from childhood? That’s also why we’re so excited to partner with BNY Mellon as the only initial brokerage and trustee under the U.S. Trump Accounts program.

This project will open a securities account for every newborn in the U.S. Funds will be invested, from their birth, into a highly diversified portfolio of publicly listed companies. I think this might just be the beginning. In the future, it could truly raise U.S. stock market participation to above 90%.

Robinhood has also recently expanded into the UK market. Compared with the U.S., the UK is even more “behind” right now: only about one-sixth of people in the UK hold stock assets. There’s no reason to think this can’t change.

If you look at the overall UK brokerage industry, you’ll find that many large traditional brokerages still haven’t implemented commission-free trading. Unlike the U.S., these UK full-service brokers haven’t really adopted this business model yet—but it’s only a matter of time.

In the long run, they will eventually have to move toward zero commission. The industry transformation that’s truly specific 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 people who don’t know, what does that actually mean?

Vlad Tenev: It’s fundamentally a blockchain—more precisely, a Layer 2 network built on Ethereum, with the underlying tech using Arbitrum. Our goal is to build it into the best blockchain for Real World Assets (RWA).

For a long time, when people talk about crypto, they usually think about Bitcoin and Meme Coins. But these assets actually don’t represent anything in the real world.

For more than a year now, Robinhood’s entire crypto strategy has been centered around one question: can we truly leverage blockchain technology to turn it into the infrastructure for real-world assets? And then, can assets that themselves have real value and real use run on-chain 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 forward our asset tokenization strategy. Last year, we held a launch event in Cannes, France. There, we officially unveiled Robinhood’s long-term asset tokenization roadmap.

At the time, we asked a question: what is the real value of asset tokenization? My answer is: like stablecoins.

Stablecoins allow hundreds of countries and regions around the world to access dollars conveniently. In the past, for many people in many countries, obtaining dollars was extremely 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 rest of the world, making it easier for people in countries whose financial systems aren’t as mature as those in the UK or the U.S. to hold U.S. stocks.

So on Robinhood Chain, we’ll introduce Stock Tokens. These stock tokens will be listed in 120+ countries and regions. Users can use their own non-custodial wallets, or use the Robinhood Wallet—our own wallet product.

We want to deliver a very strong user experience so users can easily trade and exchange Stock Tokens. With these tokens, users can get exposure to the entire U.S. publicly listed stock market. In the first phase, we’ll support roughly 2,000 U.S. publicly listed stocks. These Stock Tokens support 24/7 trading.

Additionally, they have “Portability.” That means users don’t have to fully rely on a single brokerage as the counterparty. As long as the blockchain network continues operating, these tokens can be freely transferred and exchanged.

Host: Are these Stock Tokens real-backed, supported by actual underlying assets, or are they just synthetic? Will you always truly hold the underlying assets? Do you need to get permission from the asset issuers?

Vlad Tenev: We will always stick to one-to-one real-backed support. Even if, in the future, something happens to Robinhood itself, the asset exposure that we hold will still be secure. And in this renewed re-launch of the Stock Token product, we further clarified the product architecture.

Host: What I really want to ask is: if you insist on 1:1 real backing, does a company always have the right to block its shares from being tokenized? Especially for private companies that aren’t publicly listed.

For example, suppose Robinhood itself buys part of Stripe’s shares on the secondary private market. If those shares come from an employee stock plan, can Stripe prohibit those shares from being tokenized in the future through its corporate charter? Or, as long as you legally obtain the shares, are you willing to push for it even if legal disputes might arise during the process?

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

In practice, we currently have two different models. One is the Stock Tokens model we just discussed. Another is Robinhood Ventures, which is already being launched in the United States.

Right now, the development of this business is doing quite well. Its core goal is to think about how to use traditional finance (TradFi) tools to give everyday investors access to 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 invested in multiple companies, including Stripe, OpenAI, SpaceX (before its IPO), the UK fintech company Revolut, and other outstanding enterprises.

One important principle we’ve always kept unchanged is that we respect the issuer’s will. And we always put shareholders’ interests first. We firmly believe that retail investors should have the opportunity to invest in these excellent private enterprises. And we believe that, in the long run, issuers will eventually accept that this will become a common phenomenon.

Can AI change retail trading behavior?

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

If, back then, Robinhood’s rise came from commission-free trading and early layout of mobile. Then in the next five years, in your view, how much extra market share will the brokerages that truly apply AI be able to gain?

Vlad Tenev: I’ve always had a view that humans will always trade themselves.

At the beginning of my career, I did high-frequency trading, which can be considered one of the earliest application scenarios for AI. Of course, back then people didn’t call it AI—they called it machine learning.

At the time, high-frequency trading companies were already buying GPUs. We were even among the earliest groups to use NVIDIA CUDA-accelerated cards. NVIDIA launched its first Tesla accelerators around 2010. I remember that when I was doing high-frequency trading, we were among the first to get those products.

We used GPUs to calculate securities prices and develop trading algorithms. So in a sense, financial markets were already being electrified/automated long before—quant funds kept developing more and more complex trading strategies and deploying them into the market.

Before Robinhood appeared, many people even thought high-frequency trading would eventually swallow the entire market. But later, Robinhood’s emergence brought a huge revival for retail trading.

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

The truly interesting question is whether we can open up strategies and tools that were originally only usable by top hedge funds and high-frequency trading firms to everyday investors.

Those tools are completely different from the way retail traders use them today. But can we let ordinary people use these capabilities easily without needing a computer science degree? I think that’s the really exciting part.

In my view, this is more like democratizing software engineering capabilities—not just democratizing stock trading.

Host: So will this ultimately make the whole market more efficiently perfect?

Vlad Tenev: I don’t think so. Of course there are already lots of algorithms trading automatically, but the one making decisions is still humans.

Host: But what if, in the future, every retail investor has the same AI and all it takes is clicking once, “Enable auto trading”?

Vlad Tenev: If all retail investors use the same AI agent, then the advantage created by using it itself will likely gradually disappear. The incremental value it can generate will become smaller and smaller.

Host: Does that mean human traders would then get opportunities again?

Vlad Tenev: Exactly. Financial markets are inherently extremely complex, dynamic, and full of chaos. So I believe humans and AI will ultimately form some kind of balance.

Final investment advice

Host: We’re running out of time. As per the show’s tradition, I want to ask you one final question. What is your most important investment advice for our listeners?

Vlad Tenev: I have to answer this cautiously (laughs). The reason I’ve been pushing so hard for the development of private equity markets is because many of the companies we mentioned today—like SpaceX, OpenAI, and Anthropic—either are already listed at trillion-dollar valuations, or are very likely to list at tens of trillion valuations in the future.

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 that’s why they’re becoming richer and richer. In the past, it was easier for ordinary investors to buy stocks when companies like Microsoft or Amazon were valued at just a few billion dollars, and then get 1,000x or even 10,000x returns in the public market. But that era is becoming harder to find.

That’s why we’ve been trying to make it easier for companies to enter public markets. We’ve been pushing forward related work. Of course, there’s also a possibility that even if our efforts succeed, we might still not be able to change reality.

Because companies can still easily raise financing from private markets, and in the future private financing could even become easier. If that happens, they might still wait until the trillion-dollar valuation stage to go public.

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

Our mission is to democratize private markets—so that ordinary investors can participate as early as possible in the growth of these companies, with sufficient safeguards and robust risk controls in place.

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