Bernstein Research predicts a significant uptrend in the cryptocurrency market over the next couple of years, labeling it as a “monster of a crypto cycle.” The firm has initiated coverage on Robinhood Markets Inc. with an “outperform” rating, suggesting that investors should capitalize on the anticipated resurgence in crypto trading activity. Analyst Gautam Chhugani foresees Robinhood’s crypto trading volume expanding substantially, potentially increasing nine-fold within the next two years.
Chhugani emphasizes that the current period presents an optimal opportunity to invest in Robinhood, estimating an 18-24 month timeframe for investors to benefit from the anticipated crypto market revival. He sets a bullish price target of $30 for Robinhood’s stock, which stands as the highest among analysts surveyed by Bloomberg.
Following the release of positive February operating data, including notable increases in assets under custody and trading volume, Robinhood’s shares surged by as much as 12% to their highest level since December 2021. Year-to-date, the stock has already gained over 40%. Although Wall Street’s outlook remains mixed, with some analysts advising caution, Chhugani remains optimistic about Robinhood’s potential.
As crypto assets are projected to grow from $2.6 trillion to $7.5 trillion, with Bitcoin expected to become a $3 trillion asset by 2025, driven by the success of Bitcoin-related exchange-traded funds (ETFs), Chhugani sees Bitcoin reaching a high of $150,000 next year.
Acknowledging the increasing institutional adoption of cryptocurrencies, particularly with the success of Bitcoin ETFs, Chhugani believes that Robinhood’s comprehensive crypto offering within a regulated brokerage platform positions it favorably in the market. He notes that traditional brokerage platforms like Charles Schwab Corp. have been hesitant to fully embrace crypto, leaving a significant opportunity for Robinhood to capture market share.
In summary, Bernstein Research expresses bullish sentiment towards the crypto market and anticipates that Robinhood’s resurgence in the crypto business will drive positive outcomes for the company and its investors.