Robinhood Stock Surges on S&P 500 Speculation and Crypto Growth
The stock of Robinhood Markets Inc. (NASDAQ: HOOD) is trending upward this week due to two main reasons: expectations of its addition to the S&P 500 Index, and its recent growth in the cryptocurrency sector.
On Thursday, Robinhood’s stock reached $72.27, with pre-market trading moving it up further to $73.75. This follows a report by Bank of America, which called Robinhood a “prime candidate” for the upcoming S&P 500 rebalancing. If added, Robinhood’s stock would likely see increased buying from index funds, which are required to hold stocks included in the S&P 500.
Bank of America noted that stocks added to major indices often get more attention from long-term institutional investors. That kind of activity can affect the stock price.
Robinhood has also been expanding its crypto services. It recently acquired Bitstamp, a well-known cryptocurrency exchange. The company now allows users to trade Bitcoin, Ethereum, and other cryptocurrencies, and has benefited from the recent growth in the crypto market. For example, Bitcoin is currently trading above $100,000.
In its latest monthly report, Robinhood said it now has $250 billion in assets on its platform, the highest in its history. It also recorded a 10% increase in equity trading volume compared to the previous month.
Robinhood launched a new product called Robinhood Legend, which is a trading platform designed for more active and experienced users. This is part of the company’s efforts to attract more types of investors.
The company’s stock has gained over 240% in the last year, showing strong investor interest. Some market watchers, like CNBC’s Jim Cramer, have reacted to this momentum with caution. Cramer posted a one-word message “Memed” suggesting the rise might be influenced by the kind of attention Robinhood received during the 2021 GameStop trading surge.
Still, the key factors driving the stock right now are the S&P 500 speculation and the crypto expansion.
Robinhood’s situation will become clearer when the S&P 500 rebalancing list is released on Friday, June 6.
