Robinhood’s Secret to Huge Profits: Crypto and AI

Robinhood’s big crypto strategy may be paying off, thanks to a generational shift. With more Millennials and Gen Z users adopting crypto, Robinhood stands to benefit.

Robinhood has seen immense growth in the past year as the company intensifies its crypto-based youth strategy.

A Profitable Year for Robinhood

Robinhood, the US-based financial services company and trading app, is on the verge of a new era. Pushed forward by growth in the crypto industry, Robinhood’s shares jumped more than 50% in one year.

It seems clear that Robinhood is more than a “fad,” and it’s here to stay. Where is it going, though? What kind of business strategy will give it real, lasting power? As far as leadership is concerned, the answer is simple: a crypto strategy based on the youth.

Robinhood’s CEO, Vlad Tenev, described favorable market trends that could help the company in the future.

“I think there are two big trends that could change how financial services are delivered: crypto and artificial intelligence. Robinhood intends to be a leader in both,” Tenev claimed.

Robinhood has made a series of crypto investments over the past few months. The firm purchased exchange BitStamp in June and AI firm Pluto in July. Promising “awesome” new services, Tenev has signaled that Robinhood’s crypto love will only increase.

Read more: Coinbase vs. Robinhood: Which Is the Best Crypto Platform?

Robinhood’s leadership is betting on these trends in a bid to capture Millennials and Gen Z. A report from Bernstein suggests that rising Millennial wealth will pay out huge dividends for Robinhood due to their relative pro-crypto approval.

Millennials have gone from generating 1% of US household wealth in 2010 to 10% today, and this statistic is very appealing for Robinhood. 60% of its customers come from the under-43 age bracket. In other words, growth in Millennial income will help the company’s future.

The firm is gambling on an appeal to a tech-savvy demographic in the hopes that crypto will prove attractive to these investors. As it stands, there is hard data to back up these bold assertions.

Read more: How to Buy and Sell Crypto on Robinhood: A Step-by-Step Guide

New reports from Goldman Sachs claimed that fewer than 1% of US customers still consider crypto a fad. Additionally, more than half of that number consider it a valuable asset class. These trends are only growing in younger demographics.

“Robinhood is looking less like a traditional brokerage. Of course, we have a big brokerage business, but we aim to be leaders in retirement, in wealth management over time. We think that there’s a huge opportunity with owning the financials of an entire generation,” Tenev concluded.