In a week that saw turbulence in the cryptocurrency markets, Robinhood and MARA Holdings were the only two crypto-related stocks to finish in positive territory. Robinhood, trading under the ticker HOOD on the Nasdaq, closed the week at $42.75, gaining 5.8% from the previous Friday. This positive trading trend occurred despite a downgrade from Morgan Stanley, which expressed concerns over Robinhood’s reliance on transaction-based revenue, reducing its price target from $90 to $40.
So, what’s driving Robinhood’s resilience? Wall Street analysts suggest that while the company may face short-term difficulties, particularly as retail investors grapple with economic challenges, the platform’s long-term potential remains promising. In addition, the company is not expected to face direct competition from potential IPOs such as eToro until 2025.
Meanwhile, Bitcoin miner MARA Holdings, also trading on the Nasdaq, ended the week up by 4.5% at $12.47. The company recently reported a 6% monthly increase in Bitcoin production and anticipates the completion of its 40 megawatt Ohio data center within weeks. This development represents a key step towards vertical integration, potentially reducing operating costs – a critical factor in the current Bitcoin mining landscape.
In other news, BlackRock has announced Anchorage Digital as an additional custodian for its iShares Bitcoin Trust and iShares Ethereum Trust spot ETFs. While these funds account for a combined total of nearly $47 billion in crypto assets, Coinbase’s custody business has struggled to generate significant income.
Despite doubling its custodial fee revenue to $142 million following the approval of spot Bitcoin and Ethereum ETFs in 2024, Coinbase’s custody business only accounts for roughly 6% of its $2.3 billion Q4 revenue. The company’s largest single source of revenue remains its deal with Circle to split interest earned on the cash and cash equivalents backing USDC stablecoins.
Lastly, as the U.S. potentially heads towards a recession, traditional economic indicators like the GDP are being scrutinized. While politicians may focus on the GDP as a measure of economic health, asset managers emphasize that it is a lagging indicator. James Butterfill, Head of Research at CoinShares, points out that other indicators, such as consumer confidence and bankruptcy filings, are more timely and accurate reflections of the economy’s health.
Looking ahead, the S&P Global PMI could be a more relevant measure, as it provides a forward-looking perspective based on surveys. Despite showing growth in March, the PMI reveals a strategic increase in production in anticipation of tariff increases and a widespread deterioration in business confidence – except in Russia. As the crypto world continues to navigate an uncertain economic landscape, these insights underscore the importance of a diversified, informed approach to investment.
