Bernstein’s recent coverage initiation on Robinhood (HOOD) with an outperform rating and a $30 price target signals a strong conviction in the trading platform’s potential, spurred by an anticipated “monster” crypto cycle. The brokerage firm projects the total cryptocurrency market cap to surge to $7.5 trillion by 2025, marking a nearly threefold increase from its current valuation of $2.6 trillion. This explosive growth is expected to significantly boost Robinhood’s crypto revenue, forecasting a ninefold increase in the coming years.
Forecasted Crypto Market Expansion
Bernstein’s bullish stance is underpinned by its forecast for major cryptocurrencies, with bitcoin’s (BTC) market cap anticipated to grow to $3 trillion and ether’s (ETH) to $1.8 trillion by 2025. The firm also predicts substantial growth for other leading blockchain tokens, which together could reach a combined market cap of $1.4 trillion. This optimism is grounded in the belief of unprecedented institutional adoption of cryptocurrencies, further accelerated by the potential launch of spot bitcoin exchange-traded fund (ETF) assets, which could ascend to as much as $300 billion by 2025. An ether ETF is also expected to be introduced within the next 12 months, adding to the momentum.
Robinhood’s Strategic Advantage
Bernstein views Robinhood as strategically positioned to benefit from the forthcoming crypto market boom. The platform’s recent 10% increase in crypto trading volume from January to February underscores the growing interest and engagement among its user base. As a two-year cyclical trade, Robinhood is poised to ride the wave of the crypto-led earnings inflection anticipated over 2024-25.
Market Response and Future Outlook
The market has reacted positively to Bernstein’s coverage, with Robinhood shares climbing over 10% in after-hours trading. This uptrend reflects the investor confidence in Robinhood’s ability to harness the forthcoming massive growth in the crypto market. As the cryptocurrency landscape continues to evolve, Robinhood’s strategic focus on this sector positions it well to capitalize on the trends and realize significant revenue growth in the process.
