Robinhood (HOOD) has shown notable strength in recent trading. The stock briefly moved back above the $100 level last night, although it failed to hold that mark into the close. The original commentary remains relatively optimistic about HOOD’s later performance, arguing that the recent rise can be explained across several dimensions rather than by one single catalyst.
Operating data, Rothera and IPO-related developments
On the fundamental side, Robinhood released its May operating data last week, which became one of the reference points for discussions around the stock’s recent move. On the news side, several developments have been more direct in shaping investor sentiment, especially around prediction markets, the IPO business line and the so-called “Trump accounts.”
In prediction markets, described in the source as the fastest-growing segment, Robinhood has begun using its self-built prediction market Rothera to intercept activity that previously involved Kalshi. As a result, related revenue is expected in the source’s framing to no longer require sharing with Kalshi. In the IPO arena, SpaceX’s historic IPO brought record-level traffic to Robinhood. More importantly, Robinhood Securities, the company’s brokerage and clearing unit, was approved last week to serve as an IPO underwriter, giving Robinhood a more central role in future IPO activity such as Anthropic and OpenAI.
Another key development came from the U.S. Treasury Department, which selected Robinhood as the broker and initial trustee for the “Trump accounts.” These accounts were authorized by U.S. President Donald Trump on June 9, 2025, under the “Big and Beautiful” bill as a tax-deferred investment account program. The plan is designed to establish government-funded savings accounts for children of U.S. citizens born between January 1, 2025 and January 1, 2029. In practical terms, the source argues, tens of millions of American newborns over the next several years will default to Robinhood as their brokerage platform.
From a Q2 earnings thesis to a larger rotation into HOOD
The author’s initial reason for building a HOOD position was a positive view on its Q2 earnings performance. One part of that view was that, amid what the source calls an epic rally in U.S. equities, stock-trading-related revenue for the quarter would see a major expansion. Another part was that the World Cup would drive a surge in prediction market trading volume, while Rothera would allow Robinhood to retain revenue that otherwise would have been shared.
The later decision to rotate a larger portion of holdings into HOOD, mainly from remaining crypto assets, was based on a different line of reasoning. In early May, a friend asked the author what he had bought recently, and he mentioned HOOD. At that time, HOOD had just fallen from above $90 after Q1 earnings missed expectations, mainly because of an unexpected $100 million expense related to the “Trump accounts.” Its short-term chart looked weak.
When the friend asked why, the author briefly explained the factors above. The friend then said his positions were trapped and he did not have much capital left to deploy. After asking what the friend was holding, the author found that, unsurprisingly, the positions were mainly altcoins. His response was: “Rather than staying attached to altcoins, it is better to rotate directly into HOOD.”
HOOD is no longer only a crypto shadow stock
The background to that judgment is that, for a long period, cryptocurrency-related revenue had been an important part of Robinhood’s total revenue. HOOD’s share price also had a strong relationship with crypto market movements. Recently, however, there have been signs that Robinhood is breaking away from dependence on its crypto business and is moving in a positive direction away from that correlation.
The source points first to Robinhood’s cryptocurrency-related revenue over the past five quarters. Overall, the share of this revenue has been declining, and in Q1 the proportion had fallen to its lowest level since 2025. It then compares HOOD with BTC price action. Since the beginning of the year, HOOD had mostly moved in a pattern similar to BTC, but a clear divergence has appeared recently.
The reason for emphasizing these two points is that the valuation logic around HOOD has started to change. In the past, HOOD was often treated as a “shadow stock” of the crypto market. When crypto surged, retail investors rushed into Robinhood to trade altcoins, fee revenue increased sharply and the stock price took off. When crypto cooled, retail users left the market and Robinhood’s revenue quickly weakened.
Crypto still affects HOOD, but HOOD no longer depends on crypto
The difference now is that Robinhood is no longer as dependent on cryptocurrency activity as it used to be. Even if the crypto market remains in its current sluggish condition, the source argues that stock trading, prediction markets, Pre-IPO activity and the newly added underwriting business can still support performance growth.
This does not mean the crypto market will stop affecting HOOD. On the contrary, if crypto returns to a bull market, Robinhood’s cryptocurrency trading revenue would, in the source’s view, likely expand at the same time, allowing HOOD to continue benefiting from sector growth. Put more directly, crypto still affects HOOD, but HOOD no longer depends on crypto: if a crypto bull market returns, HOOD can still rise with it; if crypto stays weak, HOOD has other business lines to rely on.
For those who still have expectations for altcoins but are increasingly worried about drying liquidity, fading narratives and value-capture problems, the source concludes that continuing to place hope in a token waiting for the next narrative cycle is less attractive than looking at HOOD, which it describes as an option with a higher margin of safety at the current stage.