HOOD Stock Gains After Treasury Taps Firm For Trump Accounts Buildout – Offers New Revenue Stream Amid Crypto Slowdown

• The U.S. Treasury announced on Monday that it has partnered with The Bank of New York Mellon and Robinhood to expand access to Trump Accounts.
• The partnership is expected to generate steady fee-based revenue, particularly for Robinhood.
• Analysts have recently lowered price targets on Robinhood, citing moderating engagement and crypto-related headwinds.

The U.S. Treasury announced on Monday that it’s teaming up with The Bank of New York Mellon (BK) and Robinhood Markets (HOOD) to help build out the accessibility on the government’s Trump Accounts. 

The agency said that The Bank of New York Mellon (BNY) will be its financial agent, helping manage initial accounts and develop the app, and Robinhood will serve as the brokerage and initial trustee for Trump Accounts. 

The new app for Trump Accounts won’t have any Robinhood or BNY branding. Any other financial terms of the deal were not disclosed. 

BK’s stock moved 1.24% higher in morning trade, while HOOD’s stock gained 1.63%. On Stocktwits, retail sentiment around Robinhood fell to ‘neutral’ from ‘bullish’ over the past day, while sentiment around BNY remained in the ‘neutral’ zone. However, retail chatter around BNY was at ‘high’ levels while Robinhood saw message volumes fall to ‘low’ from ‘normal’ levels over the past day. 

Robinhood Gains New Revenue Channel Beyond Crypto Trading

Trump Accounts are part of recently passed tax and spending legislation where the federal government will deposit $1,000 into investment accounts for every child born between 2025 and 2028 once parents sign their children up while filing their income taxes. 

Both companies are set to benefit from the steady fee revenue the partnership will provide. While Robinhood will be a new partner for the U.S. Treasury, its relationship with BNY dates back to the 18th century when the bank provided the federal government with its first loan. 

Earlier on Monday, Jefferies lowered its price target on HOOD’s stock to $84 from $88 and kept a ‘Buy’ rating on the shares, as per TheFly. “Investor engagement throughout Q1 showed some divergence across platforms and certain metrics like margin balances and securities lending have moderated along with crypto trading as volatility has climbed,” the firm said.

Last week, Needham also cut its price target on Robinhood to $90 from $100 citing slower growth in March than expected. It said the firm is still a front-runner when it comes to building a financial “super app.” Earlier in the month, Bernstein lowered its price target on the firm to $130 from $160 citing weak crypto sentiment and stress from geopolitics. 

Robinhood has been under investor scrutiny amid the current slump in the crypto market, however the company has been emphasizing that it has revenue streams that expand from cryptocurrency trading on its platform. 

Read also: Bitcoin Nears $70K On US-Iran Ceasefire Talks, $270 Million Shorts Wiped Out

For updates and corrections, email newsroom[at]stocktwits[dot]com.