Crypto is getting all kinds of MAGA.
President-elect Donald Trump has made no secret of his love for cryptocurrency, and the feeling from the sector has been mutual.
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His website proudly declares that it is "now accepting crypto."
“Demonstrating President Trump’s success as a champion of American freedom and innovation, we proudly offer you a chance to contribute to the campaign with cryptocurrency,” the site says.
“As Biden piles regulations and red tape on all of us, President Trump stands ready to embrace new technologies that will Make America Great Again.”
And he has trained his sights on Securities and Exchange Commission Chairman Gary Gensler, who has brought more than 100 actions against crypto firms during his tenure.
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“On day one, I will fire Gary Gensler,” Trump vowed during the keynote address at the Bitcoin 2024 conference in July.
Gensler has said that he was “proud to serve” the SEC, hinting at an imminent resignation, TheStreet Crypto reported.
Meanwhile Trump Media & Technology (DJT) , the parent of Trump's Truth Social social-media platform, is reportedly in advanced talks to buy the cryptocurrency trading firm Bakkt, the Financial Times reported on Nov. 18, citing two people with knowledge of the talks.
Robinhood tangles with regulators
Trump is majority owner of the media and technology company.
Shares of Bakkt — which was created by Intercontinental Exchange, the owner of the New York Stock Exchange — skyrocketed amid repeated trading halts due to volatility.
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Kelly Loeffler, a previous CEO of Bakkt, is the co-chair of Trump’s inauguration committee.
Loeffler, who is married to Intercontinental Exchange CEO Jeffrey Sprecher, left as Bakkt’s top executive in 2019 when Georgia Gov. Brian Kemp appointed her to the U.S. Senate.
She took the seat vacated by Sen. Johnny Isakson, who resigned due to health reasons. She later was defeated by Democratic Sen. Raphael Warnock.
Bitcoin has climbed to record levels above $90,000 and stocks tied to cryptocurrencies have rallied after Trump's election.
Analysts say that Robinhood Markets (HOOD) stands to gain from Trump's return to the White House.
The fintech company, which saw its shares take off after Election Day, butted heads with the SEC in May over alleged securities violations at its crypto division.
The crypto unit received a Wells Notice from SEC staff advising the unit that a preliminary determination was made to recommend that the SEC file an enforcement action against Robinhood Crypto for alleged securities violations.
Dan Gallagher, chief legal, compliance and corporate affairs officer at Robinhood Markets, said in a statement that the company firmly believed “that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
On Nov. 13, Robinhood Crypto announced the addition of Solana, Pepe, Cardano and XRP to its U.S. platform, bringing the total number of cryptocurrencies available for trading to 19.
“With lower barriers to entry, we believe crypto presents an opportunity for those who have been historically left behind by the traditional financial system,” Johann Kerbrat, vice president and general manager of Robinhood Crypto, said.
Robinhood's shares took a beating in October after the company missed Wall Street's third-quarter earnings expectations, but overall the stock has done phenomenally well.
The company's shares have surged nearly 175% year-to-date and more than quadrupled (up 322%) from a year ago.
Analyst: Robinhood positioned well in crypto market
Investment firms have been adjusting their price targets for Robinhood's stock in light of Trump's election.
Needham upgraded Robinhood to buy from neutral with a $40 price target, noting that Trump's victory stands to "materially benefit the company," primarily via changes at the SEC, according to The Fly.
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The firm says Robinhood, which went public in 2021, is attractively positioned for more crypto asset listings.
Needham noted that the company has historically limited its product suite to avoid SEC enforcement actions, but with the prospect of a change in the agency chairman's office, it noted Robinhood's launch of new offerings including the four new assets on Nov. 13.
The firm said that it also expected a retail-driven bull market to benefit Robinhood as the company has been successful in launching meme-related trading products, which appeal to retail customers. Robinhood was a prominent name during the meme stock craze earlier in the 2020s.
The Equity and Margin Business segments should act to damp volatility in crypto revenue and to position Robinhood as "a 'one-stop-shop' for financial services," the investment firm said.
Analyst: Robinhood has runway to scale crypto unit
Piper Sandler analyst Patrick Moley raised the firm's price target on Robinhood to $36 from $30 and affirmed an overweight rating on the shares.
Moley said Robinhood was a very good way to play a crypto bull market as it has significant runway to scale its crypto operations alongside an established cash equity and options brokerage business.
For as long as this crypto bull market continues, the analyst said, he expected Robinhood to see strong retail engagement and transaction volumes.
Deutsche Bank analyst Brian Bedell raised the firm's price target on Robinhood to $35 from $34 and maintained a buy rating on the shares.
Bedell said that during a conference, Robinhood Chief Financial Officer Jason Warnick reviewed continued progress around a variety of growth initiatives, including higher crypto pricing, along with the company's philosophy around operating leverage and capital management.
While much of the commentary was consistent with prior communications from management, Bedell said, he heard a few incremental comments that would support continued appreciation of the shares.
Separately, Robinhood said it would acquire portfolio management platform TradePMR in a cash-and-stock deal for about $300 million as it seeks to grab market share from traditional brokerages such as Charles Schwab (SCHW) and Fidelity Investments.
TradePMR, Gainesville, Fla., has more than $40 billion in assets under administration. The company’s team will join Robinhood.
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