HOOD - Robinhood: Darkhorse Crypto Play

2024-07-17 13:23:52 ET

Summary

• Robinhood Markets, Inc. presents a strong crypto opportunity, with recent operational data showing growth in equity and crypto trading volumes.
• Recent acquisitions of Bitstamp and Pluto Capital position Robinhood as a standout player in the cryptocurrency market, expanding their footprint and enhancing user experience.
• Despite risks such as a downturn in monthly crypto volume, Robinhood's acquisitions and growth provide potential upside in shares. Crypto volume is also still up triple digits Year over Year.
• I think this will lead to the firm grabbing even more overall market share in the retail investment space as more investors consolidate investments with them.
• In my view, Robinhood Markets stock remains a strong buy.

Investment Thesis

While in some of my previous research I have taken a bullish stance on Coinbase ( COIN ) due to their strong opportunities in custodying and trading Bitcoin (BTC-USD), I believe Robinhood Markets, Inc. ( HOOD ) presents the best crypto platform investment opportunity out there for US equity investors. Recent operational data, plus their crypto exchange acquisition, positions Robinhood as a standout player in the broader cryptocurrency market, making them an attractive investment for those who prefer not to bet on individual tokens.

As I mentioned in my last report in May (and now), Robinhood's recent operational performance has been strong. For instance, the company's equity trading volume surged by 23% month-over-month in May, while their crypto trading volume, despite a 30% month-over-month decline, has more than tripled year-over-year??. This indicates a growing user base and increased engagement with the platform's trading services. This was also before their most recent acquisition....

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