If big, boring banks aren’t worried about the rise of Robinhood Markets (NASDAQ:HOOD), they ought to be. Robinhood stock is volatile, but holding shares makes sense if you believe the financial-trading landscape is changing.
Instead of fearing change, you can choose to accept and even embrace it. There’s no turning back the clock and no undoing what Robinhood has done for the financial markets during the past decade.
So, get on board or and get ready to make some money, or just get out of the way.
Traditional Banks Hate Robinhood
When InvestorPlace contributor Shane Neagle reported that Citigroup analysts had downgraded Robinhood stock to a “sell” rating, I wasn’t surprised at all. Big-bank analysts have been skeptical of Robinhood for a long time.
Again, I must emphasize that Robinhood’s commission-free trading disrupts and threatens the business models of some big banks and brokers.
As long as the stock market continues to go up, more Millennial and Generation Z (or “Zoomer”) stock and cryptocurrency traders will join the revolution. Last year was a bullish one for stocks, and this year is shaping up to be good for both stocks and cryptocurrency.
The Citigroup analysts expressed concerns about the potential for a drawdown in stocks or Bitcoin (BTC-USD) adding risk to Robinhood stock. Yet, today’s traders and investors aren’t deterred.
There’s even a Wall Street Journal report about how retail trading activity is robust and brokers like Robinhood are thriving.
Robinhood Is a Hit Among Self-Directed Traders
Honestly, I consider it a bullish sign that the Citigroup analysts consider Robinhood stock a “sell.” I’d actually be concerned if they were massively bullish.
More importantly, Robinhood is embraced by young, do-it-yourself investors who will control a whole lot of capital in the coming years.
As KBW analysts pointed out, Robinhood controls an approximate “20% share of estimated total U.S. self-direct brokerage accounts.”
Truly, Robinhood has evolved from a trading app to a full-fledged personal-finance ecosystem. Why depend on traditional brokers when you can buy and sell stocks, ,options and cryptocurrencies through Robinhood’s platform?
Robinhood even offers a credit card now. And by the way, the revolution isn’t limited to one country or continent, as Robinhood launched its platform in the United Kingdom. I’ll bet the old, boring banks aren’t too happy about that!
Robinhood Stock: $30 Is Inevitable
Today’s young traders and investors will control the economy someday. The big banks can’t stop this from happening, even if they might shake their heads in disapproval.
None of this will happen overnight, so be patient. Disruption starts slowly, and then suddenly it’s a tidal wave. Just look at the adoption curve of Bitcoin and how its price has risen over the past 15 years.
The same thing should happen to Robinhood stock over the long term. I expect it to surpass $30 at some point, though it’s difficult to predict an exact time.
So, feel free to grab a handful of Robinhood shares. Then, just sit back and let the passage of time be your friend.