From theblock by James Hunt

Analysts at research and brokerage firm Bernstein have named crypto and stock trading app Robinhood as the top “crypto deregulation trade” of the cycle following Donald Trump’s win and a Republican sweep in this month’s U.S. elections.

Trump and the Republican party proposed various pro-crypto policies during the campaign, including establishing a national bitcoin stockpile and promising to “end the war on crypto regulation,” which are now anticipated to benefit the industry post-inauguration.

The Bernstein analysts expect HOOD to continue to outperform across key performance metrics — increasing their 2025 financial year revenue estimate to $4.19 billion from $3.85 billion due to growing market share. They project $1.3 billion in earnings for the year, valuing HOOD at 10.8x revenues and 33x earnings. They raised their price target to $51, with their prior target of $30 already hit after the election result.

Robinhood shares have already witnessed a 176% gain year-to-date, according to TradingView. The stock closed up 0.7% on Tuesday at $35.24, meaning the new target represents a 45% upside potential from here in their view. HOOD is currently trading up 2.2% at $36 pre-market.

“Robinhood has so far operated a regulatory-constrained crypto business - barely listed 15 tokens (vs. more than 250 on Coinbase), made no revenue from staking, lending, derivatives or stablecoins - offered by competing exchanges,” Bernstein analysts led by Gautam Chhugani wrote in a note to clients on Tuesday. “But under a potentially new pro-crypto SEC, this looks set to change, and we expect HOOD to be the biggest beneficiary of crypto regulatory tailwinds.”

The analysts anticipate Robinhood will increase its crypto revenues by 20% by the end of 2025 to 38% of total revenues, driven by market share gain following new potential token listings and crypto product lines.

New token listings and non-trading crypto revenue

Robinhood has been conservative on listings given the hawkish stance of the current U.S. Securities and Exchange Commission under Chair Gary Gensler, who classified the majority of tokens as securities, the analysts said. However, with another of Trump’s campaign pledges being to fire Gensler “on day one” and the prospect of a more pro-crypto SEC under his incoming administration, Bernstein expects clear rule-making on digital asset classification, allowing Robinhood to participate in both digital commodities and digital securities.

Robinhood has already listed four more tokens following Trump’s election victory: SOL, ADA, XRP and PEPE, but still lags behind major competitors, the analysts noted — a gap they expect its crypto division to begin closing in 2025.

The fintech firm has also refrained from providing additional services offered by its crypto exchange competitors, such as staking, stablecoin access and lending in the U.S. due to regulatory limitations. However, the analysts expect Robinhood to enable new product lines in the country over the next 12 months. Further expansion into Europe via its proposed $200 million acquisition of the crypto exchange Bitstamp is another potential catalyst.

Gautam Chhugani maintains long positions in various cryptocurrencies. Certain affiliates of Bernstein act as market makers or liquidity providers in the equities securities of Robinhood.