Piper Sandler says buy these stocks to profit from a wave of crypto adoption

The new Trump administration will offer a good backdrop for crypto-related stocks, according to Piper Sandler. Cryptocurrency-linked assets surged on Wednesday following Trump’s victory. The president-elect has indicated his support for the industry, and more favorable regulations under a new administration could continue to send digital currencies like bitcoin to new all-time heights . On Wednesday, bitcoin rallied above $76,000 for the first time in history. “Early in the election cycle, President-elect Trump came out in support of crypto and was viewed as the most crypto friendly candidate in the race,” wrote Piper Sandler analyst Patrick Moley in a note Thursday. “Since then we’ve seen a broader bi-partisan, pro-crypto shift in D.C. with > 200 pro-crypto candidates elected [Tuesday]. Given this shift in sentiment we expect to see comprehensive crypto legislation passed in the coming quarters and believe regulatory clarity will result in further mainstream crypto adoption.” Against this more favorable backdrop, Moley shared several stocks he currently rates overweight and that offer investors exposure to the crypto industry: The Piper Sandler analyst highlighted Robinhood as “the most attractive way to play the crypto space” within his coverage universe. Shares of the financial trading platform have more than doubled this year, surging 130%. Moley estimated that crypto made up around 13% of Robinhood’s revenues in the past 12 months. “Its monetized crypto offering is significantly more robust than traditional retail brokerage peers, with over 15 tokens available to trade,” the analyst wrote of Robinhood. “When a comprehensive regulatory framework around crypto is eventually introduced in the U.S., we believe HOOD will likely look to expand its crypto offering by (1) increasing the number of tokens available for trading on its platform and (2) introducing new products like staking (and possibly lending) to a customer base ready to adopt new crypto products.” Still, Moley’s $30 price target on Robinhood is only a fraction above where the stock closed Thursday. Moley was also bullish on shares of CME Group , up 5% this year. While crypto is currently an “immaterial” part of CME’s business — making up less than 1% of its revenue in the past 12 months — the company is the “premier venue for commercial & institutional users of crypto derivatives,” the analyst wrote. “CME currently offers 9 different crypto contracts across BTC (5) and ETH (4). However, through its partnership with CF Benchmarks it has an additional 28 reference rates that we think it could look to launch new contracts on if regulatory clarity improves,” the analyst added. Moley’s $250 price target implies that CME stock could add another 13% over the next 12 months. Although crypto made up less than 5% of Virtu Financial ‘s revenue in the past year, Moley said that the platform was “quietly operating as one of the major traditional finance players in the crypto space.” “The market maker is currently an authorized participant on ALL of the publicly traded spot bitcoin & ether ETFs (20+) and we think the future launch of options on these spot crypto ETFs could add another layer to VIRT’s crypto revenues,” the analyst wrote. “All in all, as crypto’s presence in traditional finance evolves, we think VIRT is positioned well to benefit.” Shares of Virtu Financial have climbed 65% in 2024. Moley’s $35 price target is nearly 5% higher than where the stock closed on Thursday. Finally, Moley gave an honorable mention to trading platform Cboe Global Markets . Less than 1% of the Cboe’s revenue was derived from crypto assets in the last 12 months. The company “offers & clears cash-settled bitcoin & ether futures contracts,” Moley wrote, and “recently exited its spot digital asset trading platform and consolidated its digital asset derivatives into its existing Global Derivatives & Clearing Business.” Shares of Cboe have added 12% this year, trailing the broader market, and Moley’s $220 price target implies an additional 9% upside.