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Robinhood's Canadian Crypto Play: A Gateway to $250M Revenue & Brokerage Expansion

Isaac LaneTuesday, May 13, 2025 2:10 pm ET

31min read

The crypto market’s next frontier is Canada, and Robinhood (NASDAQ: HOOD) is making a bold play to dominate it. The brokerage’s acquisition of WonderFi Technologies—a deal valued at C$250 million—positions it to unlock $250 million in annual revenue by tapping into Canada’s fast-growing crypto ecosystem and its underappreciated brokerage adjacency potential. With a regulatory license in hand and 3 million funded accounts within reach, Robinhood is poised to transform itself into a full-stack financial services platform. Here’s why investors should act now.

The Canadian Crypto Opportunity: 3 Million Accounts, and the Infrastructure to Serve Them

Robinhood’s acquisition of WonderFi is no ordinary deal. WonderFi operates Bitbuy and Coinsquare, two of Canada’s oldest and most trusted crypto platforms, with over C$2.1 billion in client assets under custody and a 28% year-over-year surge in trading volumes to C$3.57 billion in 2024. This isn’t just about crypto: it’s about accessing a market where 3 million+ users could soon hold funded accounts—a figure analysts like Mizuho’s Dan Dolev cite as foundational to Robinhood’s revenue thesis.

Canada’s crypto adoption is accelerating faster than the U.S., driven by regulatory clarity and institutional investor interest. The country was the first to approve spot-based Bitcoin ETFs, and its crypto trading volume grew by 190% between 2020 and 2022. WonderFi’s leadership in this space—serving both beginners and advanced users—gives Robinhood a ready-made customer base and the infrastructure to onboard millions more.

Mizuho’s $250M Revenue Thesis: The Brokerage Adjacency Ignored by the Market

The real prize isn’t crypto—it’s the $250 million in annual revenue analysts see Robinhood generating through its Canadian brokerage adjacency. Here’s why:

Regulatory Goldmine: WonderFi holds a Canadian Investment Dealer license, granting Robinhood the ability to offer stocks, bonds, and traditional financial products to its crypto users. This license is hard to obtain and represents a $250M+ revenue lever if even 3 million Canadian accounts spend $75 annually on brokerage services.
Cross-Selling Synergy: Robinhood can now bundle crypto trading with stock accounts, margin lending, and ETFs, creating a “one-stop financial hub” for millennials and Gen Z. This model mirrors its U.S. success but with a lower cost of customer acquisition thanks to WonderFi’s existing relationships.
Global Infrastructure: The Bitstamp acquisition—secured earlier this year—adds over 50 global licenses, including Canadian regulatory approvals, enabling Robinhood to serve institutional crypto clients while laying the groundwork for a full brokerage rollout.

Mizuho’s thesis isn’t just about crypto—it’s about leveraging Robinhood’s first-mover advantage in a market where traditional banks are slow to innovate.

Catalysts in 2H 2025: Regulatory Green Lights and Deal Closure

The deal’s success hinges on two near-term catalysts:

Regulatory Approvals: The acquisition requires approval from Canada’s Supreme Court and securities regulators. With 28% of shares already committed via voting agreements, and WonderFi’s advisors (Origin Merchant Partners and Canaccord Genuity) deeming the deal “fair,” the path to clearance looks clear.
Operational Synergy: WonderFi’s leadership and 140 Canadian employees will remain post-acquisition, ensuring continuity. The Toronto-based team will integrate WonderFi’s platforms into Robinhood’s ecosystem while maintaining brand independence—a critical strategy to retain existing users.

Why HOOD is Undervalued: A $250M Revenue Stream Not Priced In

Robinhood’s current valuation of ~$5 billion ignores this $250M revenue stream. At a price-to-sales (P/S) ratio of 2x—far below peers like Coinbase (COIN) at 4x—HOOD is a buy. The market has yet to factor in:

The Investment Dealer license: A rare asset enabling Robinhood to leapfrog competitors into regulated brokerage services.
Canada’s crypto-first demographic: Young, tech-savvy users primed to adopt traditional financial services through a crypto gateway.
Momentum from Bitstamp: A global crypto platform that complements WonderFi’s retail focus.

Final Call: Act Before H2 2025’s Catalysts Hit

Robinhood’s Canadian play is a strategic masterstroke. By acquiring WonderFi, it secures a regulatory bridge to traditional finance, a 3 million+ customer base, and a path to $250M in incremental revenue—all while competitors dither. With catalysts looming in the second half of 2025, now is the time to buy HOOD before the market catches up.

Investment Thesis: Buy HOOD at current levels. Target price: $25 (40% upside). Key risks: regulatory delays or antitrust pushback.

This analysis is for informational purposes only. Always conduct your own research before making investment decisions.

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