Robinhood Shares Surge 11.25% to $92.37 on New Blockchain Features

Robinhood shares reached an all-time high on Monday following the company's announcement of several new features, including tokenized stock trading, an Ethereum layer-2 network, and perpetual futures trading. The trading platform's stock price surged 11.25% to $92.37, marking a 148% increase year-to-date from $39 in January.

One of the key announcements was the introduction of tokenized stock trading for customers in Europe. This service allows users to trade U.S.-listed stocks and exchange-traded funds on the Ethereum layer-2 scaling network Arbitrum as tokens. Robinhood plans to eventually offer this service on its own Ethereum-compatible blockchain. Additionally, users in Europe can now stake Ethereum and Solana, a feature that has faced regulatory scrutiny but was recently clarified by the regulator as not involving securities laws.

Robinhood's European app is now fully powered by blockchain technology, encompassing tokenized stocks, crypto trading, and perpetual futures. With a Markets in Crypto Assets (MiCA) license, the company can service users in over 27 regions. This expansion into blockchain technology aligns with the growing importance of crypto in Robinhood's business. In the second quarter, the company reported $252 million in crypto revenue, a 100% increase from the same period a year ago.

The features unveiled by Robinhood mirror those of other leading exchanges. For instance, Coinbase has ventured into the scaling network space with Base, while Kraken offers tokenized stock trading to customers in Europe through xStocks on Solana. During a crypto-focused keynote event, Robinhood CEO Vlad Tenev demonstrated how Arbitrum could be used to trade a digital representation of OpenAI stock, highlighting the practical application of these new technologies.

Analysts have taken note of these developments. Ed Engel, an analyst at an investment bank, wrote that tokenized stock trading could lead to higher margin trading fees for Robinhood’s digital wallet. He raised his price target for Robinhood stock to $96 from $64, while reiterating a “Buy” rating. This positive outlook reflects the potential for increased revenue and market expansion through these new offerings.