Robinhood is serious about becoming a crypto heavyweight.
The stock-sharing app is strengthening its crypto team, has rolled out crypto trading services in the European Union, and is acquiring exchange Bitstamp for $200 million.
Such efforts will drive Robinhood’s operating income to roughly $900 million in 2024, and its market cap to between $19 billion and $23 billion in 2025, Bernstein analysts wrote in a Wednesday note.
The analysts estimated that Robinhood is on track to see $3.4 billion in revenue in 2025. The firm has seen tailwinds including demographic trends, Bernstein said.
Millennials generated about 1% of US household wealth in 2010. That figure has soared to about 10% as Robinhood ramps up its offerings of crypto, equity, derivatives and savings based products to younger demographics.
About 60% of Robinhood’s assets are from customers under the age of 43, Bernstein said.
“We want to be kind of the on-ramp to the crypto world,” Johann Kerbrat, the general manager of Robinhood’s crypto arm, told DL News in December.
The fintech’s digital asset efforts are paying off. Cryptocurrencies’ share of Robinhood’s transaction-based revenue jumped to $81 million in the second quarter, up 161% compared with the same period last year.
Robinhood is not alone in wanting to become a crypto champion. Revout, Stripe, and PayPal are making similar moves.
The bullish sentiment comes as Robinhood earlier this month agreed to buy back a more than $600 million stake once owned by collapsed FTX founder Sam Bankman-Fried. The pact draws a line under a long-disputed tussle over the Robinhood shares.
The fintech has also found itself in the Securities and Exchange Commission’s crosshairs because of its crypto services.
In May, Robinhood revealed that it had received a so-called Wells Notice, labelling the letter alerting it to potential SEC legal action as “disappointing.”
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
