A new digital assets regulatory framework could significantly expand the offerings of Robinhood (NASDAQ:HOOD) and Coinbase (NASDAQ:COIN), enabling both platforms to list a broader range of crypto assets and tokenized equities, according to a new Bernstein report.
What Happened: The report outlines how evolving regulations might reshape the competitive landscape for investment platforms, fostering integrated multi-asset trading environments.
The Bernstein report highlights that the anticipated regulatory framework, influenced by bills like FIT21 and the Lummis-Gillibrand Responsible Financial Innovation Act, could allow platforms to trade both securities and non-securities under a unified structure, overseen by the SEC and CFTC.
For Robinhood, currently operating as a broker-dealer, this clarity would broaden its addressable market.
"Clarity on listing crypto asset securities and tokenized equity securities would expand the addressable market for HOOD," the report states, noting that Robinhood has so far limited its crypto offerings to major assets like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL), which are classified as commodities, as well as meme tokens like Dogecoin (CRYPTO: DOGE).
The new framework could enable Robinhood to list tokenized equities of leading public and private companies, potentially creating new marketplaces, such as for prediction markets similar to Polymarket, which Robinhood has already integrated via the Kalshi platform.
Also Read: Trump Signs Landmark Crypto Law, Repeals Biden-Era IRS Rule Targeting DeFi Platforms
For Coinbase, the largest U.S. crypto exchange with a 66% market share, the regulatory changes could streamline operations and enhance competitiveness against international exchanges like Binance.
The report explains that Coinbase, which currently operates with multiple state licenses, could be licensed as an alternative trading platform, avoiding the cumbersome state-by-state compliance process.
"With greater regulatory clarity, COIN can be more aggressive versus international exchanges," the report notes, highlighting that over 90% of crypto trading volume remains offshore.
This shift would allow Coinbase to list more assets beyond its current conservative approach of 250 tokens, potentially including token-linked futures contracts, a market where offshore futures volumes are three to four times larger than spot volumes.
Why It Matters: The report also underscores broader industry trends supporting these changes. It points to Kraken's acquisition of NinjaTrader for $1.5 billion, enabling the second-largest U.S. crypto exchange to offer equities, ETFs and equity futures to its crypto users, illustrating a growing convergence of traditional and crypto assets.
Bernstein analysts argue that the distinction between crypto and equity traders is diminishing, as evidenced by Robinhood's success in attracting young traders who actively engage in both markets, driving operational efficiencies through integrated back-ends and blockchain technology.
Additional industry developments noted in the report include Strategy's recent acquisition of 3,459 Bitcoin for $285.8 million, bringing its total holdings to 531,644 Bitcoin valued at $35.9 billion, and Ripple's $1.25 billion acquisition of crypto prime-broker Hidden Road, which may integrate Ripple's (CRYPTO: XRP) new stablecoin RLUSD.
Marathon Digital’s (NASDAQ:MARA) initiative to energize 25MW micro-data centers using flared natural gas in Texas and North Dakota was also highlighted, showcasing cost-effective Bitcoin mining strategies.
Meanwhile, the SEC's approval of options trading on spot Ethereum ETFs from issuers like BlackRock, Bitwise and Grayscale reflects growing institutional acceptance of digital assets.
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