Confident in Robinhood with a 105% upside potential! Bernstein: Cryptocurrency market panic is only a short-term phenomenon

After the US online broker Robinhood (NASDAQ: HOOD) announced its earnings, the stock price initially plummeted, with market focus on a 38% year-over-year decline in cryptocurrency revenue in Q4. However, research and brokerage firm Bernstein believes this weak reaction reflects a "temporary crypto market panic" and should not be overinterpreted, reaffirming a $160 target price, implying about 105% upside from Wednesday’s close.

Robinhood closed Wednesday at $78, rebounding from an intraday low of $74.25, but has still fallen approximately 32% year-to-date.

The key to the market volatility lies in the divergence in revenue structure. Robinhood’s overall net revenue for Q4 grew 27% year-over-year to a record $1.28 billion, mainly driven by growth in options and stock trading. However, cryptocurrency trading revenue declined 38% to $221 million, forming a stark contrast.

Further analysis shows that the decline in Robinhood’s crypto revenue is closely related to a 52% year-over-year drop in core app trading volume. This reflects the platform’s gradual shift away from dependence on short-term retail trading surges toward diversified income sources such as subscription services (like Gold memberships) and interest income.

In a report sent to clients on Wednesday, Bernstein’s analysis team led by Gautam Chhugani noted that the slowdown in crypto trading activity and resulting revenue softness was "anticipated," and believes Robinhood’s stock price is nearing a bottom, making further bearish bets now pointless.

Bernstein states that despite turbulence in the crypto market, several core operational indicators for Robinhood remain robust, including record-high funded accounts, Gold subscription members, and Gold credit card users, as well as a doubling of retirement assets to $26.5 billion.

Additionally, Robinhood’s banking service launched at the end of 2025 has attracted over 25,000 funded customers with deposits exceeding $400 million.

The analysts also mentioned that Robinhood’s market-making business, which has repeatedly achieved strong results, has become the company’s new cash cow, accounting for about 14% of trading revenue and roughly 8% of total revenue. In Q4, the platform traded 8.5 billion contracts, well above market expectations; since early 2026, trading volume has reached 4 billion contracts, steadily moving toward the annual forecast of $270 billion.

The analysts also pointed out that Robinhood plans to launch a predictive market joint venture called Rothera, in collaboration with quantitative trading giant Susquehanna, by mid-2026. This is expected to be a key driver in transforming the company toward a broader information and capital markets ecosystem.

Looking ahead, Robinhood will focus on household finance, private markets, and asset tokenization. On Tuesday, it announced the launch of a public testnet for Robinhood Chain, an Ethereum Layer 2 network, which will support experiments with tokenized assets and plans to launch a mainnet later this year.