According to ChainCatcher, citing CoinDesk, Morgan Stanley analyst Kenneth Worthington predicts that Robinhood's (HOOD) record-breaking cryptocurrency trading revenue in the fourth quarter of 2024 may be unsustainable, with digital asset trading volume potentially declining in the first quarter of 2025. The trading platform will release its first-quarter financial report after market close on May 1st Eastern Time.
The report shows that Robinhood's cryptocurrency trading revenue surged 700% in the fourth quarter of last year, driving significant overall trading revenue growth. However, affected by the stock and bond market downturn in the late first quarter and cryptocurrency market correction, the expected cryptocurrency trading volume is projected to drop from $71 billion in the fourth quarter to $52 billion. Assets under custody (AUC) are expected to decrease by 5% quarter-on-quarter to $183.3 billion, but still grow 41% year-on-year.
Although retail buying was stimulated by US tariff policies in early April, analysts believe this is unlikely to reverse the first quarter's downturn. Weak demand for margin and derivatives trading may further drag down performance. Morgan Stanley maintains a "neutral" rating, lowering the target price by $1 to $44, implying approximately 10% downside from the current $49 stock price.
