- Robinhood and Coinbase are set to rally as the US regulatory environment becomes more clear.
- Investors are asking the same question about the crypto exchanges.
- Bernstein analysts outline why they recommend buying both stocks.
A crypto industry boom in the US is spurring a growing rivalry among two US exchange giants.
Bernstein analysts outlined their investment case.
“We answer the most asked investor question — COIN vs HOOD? We like both, but for different things,” the analysts wrote in an investor note, using the two equities' ticker names.
They see Coinbase shares soaring to $310 in the next 12 months, a 63% surge from yesterday’s closing price of $190.38. Robinhood will jump to $105 by that time, they said, more than double its current $43.66 price.
“HOOD is the most impressive product pipeline driving scalable revenue lines,“ Bernstein wrote.
Coinbase is more misunderstood.
“Investors consider COIN a simple crypto trading thesis, and are concerned on rising competition impacting margins.”
Here’s Bernstein’s case for the two companies:
Coinbase
US President Donald Trump wants to make America the world’s crypto capital.
And combined with growing share of trading volumes, “Coinbase remains the dominant platform to ride the tailwinds.”
New trading products such as perpetual futures are likely to be approved in the US, Bernstein wrote, while non-trading subscription and service revenues will jump 31%, on a compound annual growth rate over the next two years.
Meanwhile, stablecoins, staking services and other services will drive growth.
Regulatory clarity will bring more competition from fintechs, brokers, and banks, Bernstein said.
”However, we expect, a strong bull market and rising US onshore dominance to more than offset any competitive market share and pricing pressures."
Robinhood
“HOOD is better liked by investors with limited pushback except, several investors booked profits post the blockbuster fourth quarter, and are now looking for fresh entries,” the note said.
“As regularity clarity emerges, we expect HOOD to launch new tokens on the primary platform” from its current 25. Coinbase lists more than 250, it noted.
Robinhood will also launch staking and stablecoins, which combined accounted for about 25% of Coinbase’s revenue last year.
Robinhood’s acquisition of crypto exchange Bitstamp, announced in June, will also fuel gains.
Some 100 tokens are listed on Bitstamp, and the integration will “lead to HOOD’s entry in the global exchange space, driving new revenues in global retail and institutional trading, derivatives, staking and stablecoins.”
Trista Kelley is DL News Editor in-Chief.
