Bernstein Predicts Monster Crypto Cycle, Initiates Coverage of Robinhood with Outperform Rating

Investment management firm Bernstein has initiated coverage of popular trading platform Robinhood (HOOD) with an outperform rating and a price target of $30, citing a “monster” crypto cycle as the main reason for the bullish call. In their research report released on Thursday, analysts Gautam Chhugani and Mahika Sapra stated that they expect the total crypto market cap to reach an astonishing $7.5 trillion by 2025, nearly tripling the current market cap of $2.6 trillion.

Growing Crypto Market Cap to Boost Robinhood’s Revenue

In their report, Bernstein highlighted the tremendous growth potential of Robinhood’s crypto revenue, which they believe will increase ninefold as a result of the expected crypto market growth. The company announced on Wednesday that its crypto trading volume on its platform had already experienced a 10% increase in February from the previous month.

The firm predicts that bitcoin’s market cap will reach $3 trillion by 2025, while ether’s market cap will grow to $1.8 trillion. They also project that other leading blockchain tokens will reach a combined $1.4 trillion.

Riding the Crypto-led Earnings Inflection

Bernstein views Robinhood as a two-year cyclical trade, with the company poised to ride the crypto-led earnings inflection over 2024-25. They also foresee institutional adoption of cryptocurrencies, which will likely result in a surge in spot bitcoin exchange-traded fund (ETF) assets under management to as high as $300 billion by 2025. They expect an ether ETF to become available within the next 12 months.

Market Response and Conclusion

Following the release of this bullish report, Robinhood’s shares rose over 10% in after-hours trading, showing the investor’s confidence in the company’s growth potential. In summary, Bernstein has high hopes for Robinhood, making it a two-year cyclical trade with a bright future ahead.