Robinhood Stock Takes Off as Bitcoin Breaks Free From Shorts

failed_dev_successful_ape · 2025-12-26T06:15:54+00:00

Robinhood's stock is rising due to a surge in Bitcoin trading, driven by a short squeeze that increases buying pressure. With crypto trading now over 30% of its revenue, Robinhood stands to gain, but its high valuation raises concerns about sustaining growth amidst volatility.

failed_dev_successful_ape

2025-12-26 06:15:54

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The online brokerage is soaring today, and there’s a pretty straightforward reason why: Bitcoin traders are having a field day.

The Short Squeeze Effect

Bitcoin is running higher, and here’s where it gets interesting. When BTC rallies like this, short sellers get trapped. As the price climbs, their positions deteriorate, forcing them to buy back at higher prices just to cut losses. This buying pressure pushes Bitcoin even higher, tightening the squeeze further. It becomes a self-reinforcing cycle.

Why does this matter for Robinhood (NASDAQ: HOOD)? Because when Bitcoin moves like this, so does trading activity on the platform. The cryptocurrency side of Robinhood’s business has exploded—crypto trading now represents over 30% of the company’s transaction-based revenue and surged more than 300% in the last quarter alone.

Trading Volume Tells the Story

Right now, Bitcoin trading volume is spiking noticeably. According to market data, Bitcoin (CRYPTO: BTC) is currently trading around $89,000 with a 24-hour gain of 1.46%, backed by $819.26M in daily trading volume. When volumes spike like this, Robinhood captures a meaningful portion of that activity.

Add in the fact that spot Bitcoin ETFs from BlackRock have become some of the most actively traded contracts in the U.S., and you’re looking at a genuine surge in retail interest around cryptocurrency trading.

The Valuation Question

Here’s the catch: Robinhood stock trades at roughly 53 times trailing earnings, which is steep. That valuation only makes sense if the company can grow earnings by 22% or more annually for the next five years. On paper, that’s a tall order.

But if volatility continues and traders keep rotating through Bitcoin, there’s a path for Robinhood to grow into this valuation. The crypto trading cycle we’re watching play out right now could be exactly the kind of sustained momentum that makes the numbers work.

The real question isn’t whether Robinhood will benefit from today’s move. It will. The question is whether these trading spikes become the norm or remain sporadic events.

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