Bernstein Sees 78% Upside for Robinhood on Tokenization Growth

Analysts at research and brokerage firm Bernstein have reaffirmed their Outperform rating on Robinhood Markets, citing significant growth potential in the company's crypto business. The analysts argue that Robinhood is evolving from a trading platform to a tokenization infrastructure provider.

According to Bernstein's note, key drivers of this growth include Robinhood Chain, which has generated over $12 billion in decentralized exchange volume and surpassed 150 million transactions since launch; tokenized stocks; Bitstamp; and Robinhood Earn, which has attracted more than $200 million in deposits. Additionally, the company's Rothera exchange, launched in June, has processed over 3.5 billion contracts to date, generating $17 million in revenue during the second quarter.

The analysts also highlighted the importance of prediction markets for Robinhood's future growth, with management expecting a greater share of flow to migrate to Rothera over time. Event-contract revenue reached $156 million in the second quarter, surpassing crypto trading's $100 million as industry volumes eased.