Once and current President Donald Trump's official memecoin, known as $Trump, took off like a bat out of Hoboken when it was unveiled on Jan. 17, along with First Lady Melania Trump's coin, $Melania.
But both cryptocurrencies did an about-face on Jan. 21 and started sinking, one day after Trump's inauguration.
Bitcoin (~BTCUSD) and other cryptocurrencies were down as well after the 47th U.S. president's first set of policies made no reference to the asset class, according to Reuters.
Trump had declared himself the pro-crypto candidate prior to the November election and promised to launch a strategic national crypto stockpile if he were elected to a second term.
Leading crypto firms pumped at least $10 million into the Trump inaugural fund, and top executives flocked to Washington ahead of the incoming president’s swearing-in, Politico reported.
Coinbase and Kraken and the stablecoin company Circle, which issues a token that is pegged to the value of the U.S. dollar, each donated $1 million to the inaugural fund, while Robinhood Markets (HOOD) kicked in $2 million.
Baiju Bhatt (right) and Vlad Tenev, founders of the online brokerage Robinhood, walk along Wall Street, which has seen its shares soar from a year ago.Spencer Platt/Getty Images
Robinhood, by the way, recently butted heads with the Securities and Exchange Commission, which announced on Jan. 13 that two of the company's subsidiaries, Robinhood Securities LLC and Robinhood Financial LLC, agreed to pay $45 million in combined civil penalties to settle a range of SEC charges.
$Trump is available on the Robinhood exchange platform. Unlike the Trump coin, the fintech company's shares have been making some mighty impressive whoopee over the past 12 months.
Robinhood, which is scheduled to report quarterly results on Feb. 12, has seen its shares more than quadruple (up 340%) from a year ago.
CNBC's Jim Cramer said that "this is the young person's brokerage house and young people indeed will inherit not only the Earth but a ton of money."
"I think Robinhood is doing some great things with the IRA and retirement," he said. "I've been impressed. All I can say is that the old Robinhood has matured."
Robinhood business model sustainable: Morgan Stanley
Investment firms have been impressed as well, and several reports that they recently issued expressed enthusiasm for the Menlo Park, Calif., company.
Analysts at Morgan Stanley added Robinhood to the firm's Financials' Finest list.
"We see a sustainable business model (as opposed to a meme stock) that’s expanding into different business lines with many vectors for growth that’s not yet reflected in valuation and the shareholder base," the investment firm's analyst wrote, accordfing to TheFly.
Morgan Stanley has a $55 price target and an overweight rating on Robinhood's shares.
"We see attractive opportunity for HOOD to participate more aggressively in crypto given scope for deregulation and see upward bias to estimates given scope for sustained retail engagement as capital markets activity builds," the firm wrote
Morgan Stanley said it saw Robinhood’s product velocity accelerating as the company expands the platform with recent initiatives including active trading/desktop, card, retirement, and expansion in Europe and the U.K.
In October, Robinhood said it would enable customers in the European Union to deposit and withdraw more than 20 digital currencies through its platform.
"We see a catalyst-rich path as those initiatives take hold/contribute to results, and as new initiatives launch in 2025 that we expect including event contracts, banking/lending, staking, stable coins, more tokens, and a new Asia hub," the firm said.
Taking a step back, Morgan Stanley said that growth across brokers in net new assets — the net change in new client assets under management — is a key focus.
The investment firm sees opportunity for recovery and improvement in net new assets as wealth creation events, such as mergers and acquisitions and IPOs, build through 2025.
Indeed, Morgan Stanley said in a Jan, 14 research note that "a favorable regulatory environment and almost $3 trillion in uncommitted capital are among key factors that could lead to a comeback for mergers and acquisitions."
"A new U.S. presidential administration could usher in relaxed antitrust and merger guidelines, facilitating deals," the firm said.
"At the same time, financial sponsors may consider finally selling the companies or stakes in companies that they acquired in previous years, returning money to investors from funds nearing the end of their lives in order to raise new funds," Morgan Stanley said.
Bernstein names Robinhood to best idea list
Bernstein recently named Robinhood the firm's new Best Idea in Global Digital Assets coverage.
The company has so far operated a constrained crypto business, but the firm expects this to change as the regulatory environment for crypto becomes more favorable.
Robinhood's share about tripled in 2024, but Bernstein sees yet more upside as strong revenue growth is set to continue to drive profitability in 2025. The firm has an outperform rating on the shares with a price target of $51.
And JMP Securities boosted the firm's price target on Robinhood to $60 from $53 while affirming an outperform rating on the shares amid a broader research note on financial services companies.
The firm said that it was optimistic about the potential for a building recovery in the capital markets and generally anticipated a more favorable operating environment for financial services and fintech companies.
JMP sees additional momentum as policy and regulatory details take shape from the incoming Trump administration.
Robinhood is one of the firm's top four stock ideas where the risk/reward balance is viewed as most compelling.
