JPMorgan Chase: Robinhood's crypto revenue is expected to decline in Q1 after hitting a record by the end of 2024

According to CoinDesk, Morgan Stanley analyst Kenneth Worthington predicts that Robinhood's (HOOD) record breaking cryptocurrency trading revenue in the fourth quarter of 2024 may be unsustainable, and digital asset trading volume may decline in the first quarter of 2025. The trading platform will release its first quarter financial report after market hours on May 1st Eastern Time. The report shows that Robinhood's cryptocurrency trading revenue surged by 700% in the fourth quarter of last year, driving a significant increase in overall trading revenue. However, due to the impact of the stock and bond double kill in the later part of the first quarter and the cryptocurrency market downturn, it is expected that the cryptocurrency trading volume for the quarter will decrease from $71 billion in the fourth quarter to $52 billion. The size of assets under custody (AUC) is expected to decrease by 5% month on month to $183.3 billion, but still increase by 41% year-on-year. Although retail investors were stimulated to buy in early April due to US tariff policies, analysts believe it will be difficult to reverse the decline in the first quarter. The weak demand for margin and derivative trading may further drag down performance. JPMorgan Chase maintains a "neutral" rating and has lowered its target price by $1 to $44, implying approximately 10% downside potential compared to the current stock price of $49.