Robinhood's Rally: Is Global Expansion the Next Big Catalyst?

Key Points

• Shares of Robinhood Markets have gone on an absolute tear over the past 52 weeks, approaching returns of 200%.
• However, expectations for this stock are now high. It needs to keep adding avenues for growth.
• What are the merits of Robinhood's ambitious plan for international expansion? Can it create significant value and boost shares in 2025 and beyond?

One of the hottest big-name stocks over the past 52 weeks has been Robinhood Markets NASDAQ: HOOD. As of the Mar. 4 close, Robinhood shares are up over 178%. The investing platform that is popular with younger users has somewhat reinvented itself. It has gone from a meme stock to a highly relevant investment platform.

Aside from crypto trading, retirement accounts and the Gold Subscription plan have been strong growth drivers. Interest income growth has also played a key role.

Still, given the massive uptick in the financial company’s share price, it is important to examine areas where Robinhood is looking to drive future growth. The company is making a significant push into international markets for expansion.

Below is an analysis of the potential of this opportunity and Robinhood’s ability to execute it.

Robinhood's Global Expansion: How the Investing Giant Is Scaling Beyond the U.S.

Robinhood has begun its international expansion in the United Kingdom (U.K.) and Europe, now holding over 100,000 non-U.S.-funded accounts—less than 0.5% of its total customer base. This highlights the early stage of its global growth and the significant opportunity ahead.

However, it also introduces risk as the company will have to compete with more established players in these foreign markets.

The firm has also picked Singapore as the country where it will base its operations to expand into the Asia-Pacific (APAC) market. The company aims to grow its international reach to millions and then to tens of millions of customers.

Bitstamp: A Game-Changer in Robinhood’s International Growth Strategy

Robinhood’s strategy for international expansion may soon be getting a shot in the arm. In Jun. 2024, the company announced plans to acquire Bitstamp. This acquisition is on track to close by Jun. 2025. Bitstamp is the world’s longest-running cryptocurrency exchange and has key licenses and registrations in Europe, the U.K., and Asia. 

This is important, as it helps bypass some of the time-consuming legwork that Robinhood would have to go through to get these licenses itself. Also, the firm has over 5 million customers. This can help quickly boost Robinhood's international reach. Over time, Robinhood can add more services like those it already has in the United States to boost its international revenue per user.

Kaiko Research reports that Bitstamp held the fourth spot in euro-denominated crypto volume in November 2024, with an 8% market share. So, the transaction helps Robinhood gain a notable foothold in this market. The acquisition also helps Robinhood enter the institutional crypto market. Robinhood focuses entirely on retail investors.

In contrast, Bitstamp serves both retail and institutional clients. Robinhood has $12.3 billion in cash and equivalents on its balance sheet. The company can easily absorb the just $200 million cash price it is paying for Bitstamp. Given the relatively low cost of this deal versus the potential benefits, this seems like a smart choice for Robinhood.

Still, it's important to note that euro-denominated crypto trading volume is only about 15% of U.S. dollar (USD) denominated volume. Euro-denominated volumes grew by 116% from Jan. 2024 to Nov. 2024. Although this is very strong, it lags behind the 192% growth for USD-denominated volume.

Could Robinhood’s International Expansion Drive Future Stock Gains?

Focusing on Robinhood’s expansion in the EU, there is significant reason for optimism but also risks to consider. Entering this new market adds significant potential for growth. Getting the Bitstamp acquisition approved will make this entrance much smoother.

However, the euro-denominated crypto market is notably smaller than the U.S. market and is growing more slowly. The EU has stricter crypto rules than the United States. This could add extra costs for Robinhood and might impact the business's overall profitability.

Still, Robinhood’s EU expansion has the potential to be solidly accretive to the business in late 2025 and beyond. However, the approval of the Bitstamp purchase is key to achieving success. This is additionally true as Robinhood looks to expand into the APAC region later on.

Crypto trading in Asian currencies represents a far larger market than Europe. Overall, the completion of the Bitstamp transaction and the international customers it can bring could be an important catalyst that provides a boost to the stock later in 2025.