Robinhood Stock Jumps 12%. How Crypto Is Fueling the Rally. — Barrons.com
By Nate WolfRobinhood Markets stock spiked Monday after the trading platform unveiled a series of new crypto-focused offerings to users in the U.S. and Europe.At a ritzy seaside event in Cannes, France, Robinhood executives announced something for everyone: perpetual crypto futures and tokenized stocks and ETFs for EU users and crypto "staking" and credit-card rewards, among other offerings, for those in the U.S.Robinhood shares were up 12% to $92.76 following the news."We have a chance to prove to the world what we've believed all along, that crypto is much more than a speculative asset," said CEO Vlad Tenev, clad in a white pinstripe suit at the company's livestreamed presentation. "It has the potential to become the backbone of the global financial system."The announcements represent another effort by the company to shed its initial image as a hub for meme-stock traders and transform into a mature, all-in-one financial services business with banking, credit cards, financial advice, and more. Crypto will clearly play a major role in that development.In the EU, Robinhood is introducing U.S. stock and ETF tokens to its platform to give Europeans exposure to American equities. Tokenized stocks — a much-hyped asset class among crypto bulls — mimic the underlying equities, but are issued via blockchain technology rather than traditional exchanges.The company also announced its own blockchain network, called Layer 2, that will eventually allow in-house tokenization of equities and other "real-world assets."In addition to tokenized equities, EU customers will get access to crypto perpetual futures, a derivative product that provides levered exposure to the already volatile asset class. The company is prepared to introduce the product in the U.S. if crypto futures receive approval from the Commodity Futures Trading Commission, said Johann Kerbrat, the general manager of Robinhood Crypto.In the U.S., Robinhood touted the addition of crypto "staking" for Ethereum and Solana holders. Staking provides holders a yield on their tokens for locking them up as collateral to help validate transactions and secure the blockchain network. The feature will also be available to customers in the EU and European Economic Area, Robinhood said.Other additions for U.S. customers include crypto reward options for the Robinhood Gold Credit Card, specific tax lots for crypto trades, and an AI-powered crypto investing assistant for premium members.Altogether, the laundry list of new features points to an intense focus on digital assets at a time when crypto-focused stocks like Coinbase Global and Circle Internet Group are booming, industry peers are going public, and the regulatory environment is clearing up.Buoyed in part by those trends, Robinhood stock has soared more than 300% in the past 12 months and 147% so far this year.Andrew Welsch contributed to this article.Write to Nate Wolf at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.