In a recent research report, prominent brokerage firm Bernstein has highlighted Robinhood (HOOD) as the company most likely to benefit from potential cryptocurrency deregulation in the United States. The analysts believe that under a possibly pro-crypto Securities and Exchange Commission (SEC) in the Donald Trump administration, Robinhood could be poised for significant growth in its crypto offerings and revenue.
Robinhood’s Restricted Crypto Business Ready to Expand
Bernstein’s analysts, led by Gautam Chhugani, note that Robinhood has thus far operated a “regulatory restricted crypto business,” listing only 19 cryptocurrencies for trading. The California-based company has not yet generated revenue from popular crypto services like staking, lending, derivatives, or stablecoins due to the current regulatory environment.
However, the analysts predict this is about to change under new SEC leadership that may take a more favorable stance towards cryptocurrencies. They expect Robinhood to be “the biggest beneficiary of the favorable regulatory tailwinds in crypto.”
Potential for Higher Revenue and New Crypto Products
With a shift in regulatory winds, Robinhood could unlock higher revenues by listing additional crypto tokens and introducing new product lines. According to a source familiar with the matter, the trading app may soon offer an expanded array of crypto-related services to its American customer base, tapping into a larger market opportunity.
“Under a potentially new and pro-crypto SEC, this [restricted crypto business] looks set to change, and we expect HOOD to be the biggest beneficiary of the favorable regulatory tailwinds in crypto,” the Bernstein analysts wrote.
Bitstamp Acquisition to Boost Value-Added Crypto Services
Robinhood’s acquisition of Bitstamp, a European crypto exchange, is also expected to “further boost value-added crypto services” that the company can offer. With Bitstamp’s platform, Robinhood could potentially provide staking services, stablecoin access, and crypto lending products to its users.
Recent Crypto Listings and Stock Price Surge
In the wake of Trump’s win in the U.S. presidential election, Robinhood has already started expanding its crypto offerings. Last week, the trading platform added support for Solana (SOL), Pepe (PEPE), Cardano (ADA), and XRP (XRP), bringing its total tradable cryptocurrencies for U.S. customers to 19.
News of Robinhood’s positioning as a top crypto deregulation play has boosted investor confidence, with the company’s stock price rising over 2% to around $36 in early trading following Bernstein’s report. The brokerage also raised its price target for Robinhood from $30 to $51, maintaining an “outperform” rating for the stock.
Looking Ahead: Robinhood’s Crypto Potential
As the crypto industry awaits clearer regulations and potentially more favorable policies under the incoming administration, Robinhood appears well-positioned to capitalize on any regulatory shifts. With its popular trading app, growing crypto offerings, and the strategic Bitstamp acquisition, the company could emerge as a major player in the evolving crypto landscape.
However, it remains to be seen how quickly and to what extent the regulatory environment will change. While pro-crypto policies could certainly boost Robinhood’s growth prospects, the path forward may not be without challenges as policymakers navigate the complex world of cryptocurrency regulation.
For now, investors and crypto enthusiasts alike will be closely watching Robinhood’s moves in the coming months, as the company looks to leverage its position and expand its foothold in the dynamic cryptocurrency market amid potential regulatory shifts under the Trump administration.
