Robinhood stock jumps 11% as BTC rally fuels crypto shares: Can HOOD hold the gains?

Robinhood shares surged 11% on Friday as a sharp rally in Bitcoin lifted crypto-related stocks across the market.

Bitcoin was trading near $77,000, up substantially from around $62,800 at the beginning of the week, as investors poured into digital assets following a combination of macroeconomic and policy catalysts.

The move has provided a fresh boost to Robinhood HOOD, whose trading platform allows customers to buy and sell cryptocurrencies alongside stocks and other assets.

Other crypto-linked stocks also advanced sharply. Strategy rose more than 6%, while Coinbase gained about 9% and Circle Internet Group climbed roughly 9%.

The rally follows a turbulent period for risk assets, with markets initially responding positively to a retreat in Treasury yields before a powerful short squeeze accelerated the move in cryptocurrencies.

According to CoinGlass, roughly US$2.7 billion (approx. $3.5 billion) in crypto short positions were liquidated, forcing traders who had bet against digital assets to close their positions and adding further buying pressure.

Treasury intervention helped trigger the move

The initial catalyst came from the bond market.

Treasury yields fell sharply on Wednesday after the US Treasury announced plans to double the size of its planned buybacks of longer-dated government debt.

The intervention temporarily eased pressure on risk assets, including cryptocurrencies, which tend to be sensitive to changes in liquidity and borrowing costs.

Max Stuedlein, head of Partnerships at Sygnum APAC, said Bitcoin's rally reflects an alignment of macroeconomic and policy catalysts.

“The Treasury’s decision to double its buybacks of long-dated government debt is aimed at addressing long-term yield concerns, where borrowing costs have been rising on concerns over US debt levels and partial crowding out by debt issuances of hyperscalers,” he said.

The effect has since broadened beyond Bitcoin as investors have moved into crypto-related equities.

Institutional demand is strengthening

The Bitcoin rally is also being supported by renewed demand from US investors.

Spot Bitcoin ETFs attracted US$606 million (approx. $781.8 million) in inflows on Thursday, up from US$517 million (approx. $667 million) a day earlier.

Total inflows this week have exceeded US$1.6 billion (approx. $2.1 billion), marking the strongest weekly performance since October last year.

That institutional demand provides a stronger foundation for the rally than short covering alone, although it remains unclear how long the pace of inflows can continue.

For Robinhood, stronger crypto activity can translate into higher transaction revenue.

But the company has increasingly sought to demonstrate that its business is becoming less dependent on cryptocurrency trading.

Crypto accounted for just 12.88% of Robinhood's transaction revenue in the second quarter, down sharply from a peak of 53% in the fourth quarter of 2024.

Robinhood eyes bigger role in tokenized equities

Layered onto the broader policy catalyst is Robinhood’s push into tokenized equities.

CEO Vlad Tenev published a widely circulated piece on August 18 urging US policymakers to modernize securities laws to allow blockchain-based versions of stocks to trade domestically.

He warned that the US risks falling behind overseas markets, where tokenized equity trading has reached US$9 billion (approx. $11.6 billion) in volume in 2026, an increase of more than 800% year to date.

The SEC is also reportedly working on an “innovation exemption” that could allow approved platforms to offer 24/7 trading in tokenized stocks.

Such a framework could give Robinhood a significant regulatory runway for expanding its existing tokenization products.

Analysts remain divided on Robinhood

Despite Friday's jump, Robinhood shares remain down about 8% this year, highlighting the uncertainty surrounding the stock.

Fundstrat Global Advisors co-founder and head of research Tom Lee has reportedly included HOOD among the stocks he expects investors to avoid in 2026.

His cautious stance is notable because Lee has generally been viewed as a strong supporter of the cryptocurrency market.

Other investors disagree.

Kevin Simpson, founder and CIO of Capital Wealth Planning, said he does not share Lee's bearish view.

Robinhood's second-quarter revenue increased 32% year over year to a record US$1.3 billion (approx. $1.7 billion), while earnings per share rose 48% and net deposits reached a record US$22 billion (approx. $28.4 billion).

Simpson acknowledged that the valuation is high but said he remains confident in CEO Vlad Tenev and Robinhood's ability to attract younger investors.

Joseph Terranova of Virtus Investment Partners described Lee's position on Robinhood as "counterintuitive."

Bryn Talkington, managing partner at Requisite Capital Management, also disagrees with Lee, arguing that Robinhood remains closely tied to cryptocurrency and could benefit significantly if the crypto market continues to recover.

Goldman Sachs recently added to the bullish outlook, raising its price target for Robinhood to $123 while maintaining a Buy rating.

The broader analyst consensus remains positive, with an average price target of around $124.73 and an Overweight rating.

Valuation remains the biggest concern

The strongest argument against chasing Robinhood after Friday's rally is its valuation.

The stock trades at a forward non-GAAP price-to-earnings ratio of about 38.3, compared with a sector median of 11.34.

Its trailing non-GAAP P/E is around 38.5, while the GAAP P/E stands at roughly 46.2.

That means investors are already paying a substantial premium for future growth.

Bulls argue that the premium is justified because Robinhood is expanding beyond crypto and building a broader financial platform.

The declining contribution of cryptocurrency to transaction revenue supports that argument.

But a high valuation also leaves the stock vulnerable if growth slows or investor appetite for risk assets weakens.

Bitcoin's rally faces its own risks

There are also warning signs within the cryptocurrency market itself.

According to Crispus Nyaga, market analyst at Invezz, Bitcoin's Relative Strength Index has climbed to about 85, its highest level since November 2024.

An RSI above 70 is generally considered overbought, suggesting that the recent rally may have moved too quickly.

That does not necessarily mean Bitcoin must fall immediately, but it increases the risk of profit-taking after such a sharp move.

The bond market presents another potential threat.

US long-term Treasury yields have resumed their climb after the initial impact of the Treasury's buyback announcement faded.

The 30-year yield rose to about 5.246% on Friday, approaching its year-to-date high.

Higher yields can put pressure on speculative assets by making relatively safer fixed-income investments more attractive and tightening financial conditions.

Can Robinhood sustain the rally?

Friday's surge shows how quickly Robinhood can benefit when Bitcoin and broader risk appetite turn higher.

The company's strong operating growth and declining reliance on crypto also give investors a reason to view it as more than a pure cryptocurrency proxy.

But the stock's elevated valuation means expectations are already high.

For now, Bitcoin's momentum, strong ETF inflows and renewed appetite for crypto-related equities are working in Robinhood's favor.

The question is whether those factors can overcome an increasingly overbought cryptocurrency market and renewed pressure from Treasury yields.