Robinhood Markets Inc. HOOD has been identified as the leading beneficiary of potential regulatory shifts in the cryptocurrency sector, according to a Bernstein report.
What Happened: The research firm highlighted the brokerage platform as the “Top ‘Crypto Deregulation’ Trade,” increasing its price target to $51, up from $30, reflecting a 46% upside.
In a note issued on Wednesday, Bernstein attributes Robinhood’s potential for significant growth to a combination of regulatory changes and a diversified product pipeline.
“HOOD's crypto revenues for 2025E have been increased by 20%, driven by new token listings and expanded product offerings,” the report states.
The company's conservative approach to token listings under current SEC constraints is expected to evolve under a pro-crypto regulatory environment, enabling Robinhood to list more digital assets and introduce services like staking, lending and stablecoins.
Robinhood's share price has surged by approximately 170% year-to-date, and its increasing market share in crypto trading is projected to drive profitability.
By 2025, the company is expected to achieve earnings exceeding $1.3 billion, supported by operating leverage from its largely fixed cost structure.
Why It Matters: The report highlights Robinhood’s cautious but promising entry into new markets.
Currently listing 19 tokens on its U.S. platform, Robinhood lags behind rivals like Coinbase Inc. COIN, which lists over 250 tokens.
However, Bernstein expects the brokerage to narrow this gap as the regulatory environment becomes more crypto-friendly. The company recently added tokens like Solana SOL/USD, Cardano ADA/USD, Ripple XRP/USD and PEPE PEPE/USD, signaling its readiness to capitalize on emerging opportunities.
"Robinhood is set to introduce a broader suite of crypto products, including value-added services like staking and stablecoins," the report highlights, adding that the firm’s acquisition of Bitstamp and its EU crypto platform further solidify its position in the evolving market.
Robinhood has demonstrated strong financial metrics in 2024, with assets under custody (AUC) growing over 50% year-to-date to $160 billion and a 51% month-over-month increase in crypto trading volumes for October.
Bernstein anticipates that Robinhood's crypto revenues will grow to represent 38% of its total revenues by 2025, a significant leap from 7% in 2023.
"We expect Robinhood to benefit disproportionately from crypto regulatory tailwinds, with 2025 marking an inflection point for earnings growth and market positioning,” the report further states.
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