Investment firm Bernstein said in a new report that the current digital asset rally remains in its early innings, reaffirming its bullish stance on the broader crypto market despite a drop in second-quarter trading volumes.

What Happened: "We believe we are still early in the crypto bull cycle," Bernstein analysts wrote in a Thursday note following Robinhood‘s HOOD Q2 earnings announcement.

The team highlighted the trading platform's ability to expand crypto-related revenues and product offerings despite flattish price action in Q2.

Robinhood posted a strong second quarter, with revenues up 46% year-over-year and adjusted EBITDA margin climbing to 56% from 51% in the prior quarter.

While total crypto trading volume fell 39% sequentially due to lower market volatility, Bernstein pointed to a resurgence in activity in July.

According to the report, Robinhood saw crypto volumes spike to six-month highs last month, suggesting stronger tailwinds heading into the second half of 2025.

The analysts said the recent price momentum in assets like Ethereum ETH/USD, Solana SOL/USD, and DeFi tokens coincided with renewed investor interest sparked by the upcoming Circle CRCL IPO and the growing narrative around stablecoins and tokenization.

This, they argued, has driven fresh capital flows back into blockchain-based assets.

Also Read: Ethereum ETFs, Treasury Companies Now Hold Over $32B In ETH: Here’s What’s Driving The Frenzy

Why It Matters: Bernstein also noted that Robinhood has continued to expand its crypto product offering despite the broader market's consolidation.

The firm cited several initiatives including the integration of Bitstamp, launch of a tokenized stock product in the EU, new staking features in the U.S., and additional token listings.

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Importantly, the report observed that Robinhood's crypto take rate rose to approximately 57 basis points, reflecting improved pricing power.

That figure is up nearly 20 basis points from the year prior.

According to Bernstein, the company's gains in take rate, coupled with operating leverage and expanding product breadth, position it well as broader market activity picks up.

On the broader business front, Robinhood's assets under management rose 99% year-over-year to $279 billion, buoyed by rising market valuations and a steady stream of customer deposits.

Net deposits reached $13 billion for the quarter, reflecting 25% annualized growth. Its "Gold" subscription product now boasts 3.5 million subscribers, up 76% year-over-year, while its Gold credit card surpassed 300,000 cards issued.

Bernstein reiterated its "Outperform" rating on Robinhood, maintaining a $105 price target.

Notably, the stock closed at $106.10 on July 30, up 420% over the past 12 months.

The firm sees continued upside in the second half of 2025, fueled by stronger crypto trading volumes and management's ability to execute.

"HOOD stock price has run up driven by increased investor appetite for Crypto exposure helped by a strong bull cycle," Bernstein wrote, adding that the company is delivering earnings in line with projections and that "we see HOOD continuing to deliver EPS closer to our estimates of $2.15."

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