Robinhood Markets Inc. (HOOD  ) has witnessed a notable surge in its cryptocurrency trading volume, experiencing a 75% increase in November compared to October.

This surge was accompanied by a substantial $1.4 billion in net asset deposits during the same month. The company made a strategic move by expanding its crypto trading services into the European Union, significantly broadening its exposure to the digital asset class.

While Robinhood initially faced a decline in its stock following its third quarter (Q3) results, the narrative quickly shifted as the stock soared by 43% in the past month.

Three key catalysts point toward a sustained uptrend:

  • The resurgence of Bitcoin and market activity: The company's focus on cryptocurrency trading presents a compelling growth opportunity. Bitcoin's remarkable performance, up 147%+ year-to-date and 59% in the last six months, fueled by expectations surrounding a potential approval of a spot Bitcoin ETF by the SEC, adds further potential for revenue growth. The resurgence in market activity, combined with the renewed interest in meme stocks, also positions Robinhood for increased trading volumes, especially in options trading.
  • Robinhood's global expansion: The Menlo Park, California-based company is gearing up for international expansion. It will start with the UK market in 2024 and subsequently rolling out crypto trading services in the EU, Robinhood is strategically positioning itself for sustained growth on a global scale.
  • Fundamental improvements: Including growth in assets under custody, an increase in net cumulative funded accounts, a rise in Gold subscribers, and robust net deposits. Notably, a substantial 96% surge in interest revenue plays a crucial role in driving overall progress.
The Recent HOOD Stock Surge

HOOD stock's surge has been more notable since November. The consensus price target for the stock stands at $13.93 a share.

Robinhood, Long-Term, Looks Promising

JPM Securities has rated the stock as Market Outperform with a price target of $23 a share. Analyst Devin Ryan believes that Robinhood currently represents over 25% of the U.S. market. Its penetration in the U.K. could potentially add millions of new accounts.

While immediate financial gains may be limited, the long-term perspective (3-5 years) is promising. Ryan sees incremental customer value increasing as the platform expands into additional revenue-generating features.

Robinhood has the opportunity to leverage existing infrastructure towards generating a competitive advantage.

HOOD Stock Price Action: Robinhood Markets' stock was trading at $11.71 at the time of publication on Tuesday.