Robinhood Blockchain Could Spur This ETF

Shares of Robinhood Markets (HOOD) closed the holiday-shortened week in strong fashion, surging after the financial technology (fintech) company introduced Robinhood Chain — an internally developed Ethereum-based layer 2 blockchain that will serve as a foundation for the company’s burgeoning presence in the world of tokenized assets.

The news sent the Direxion Daily HOOD Bull 2X ETF (HODU) — designed to deliver 200% of the daily returns of the stock — soaring, confirming the ETF lived up to its billing as a fine one-day instrument.

That doesn’t mean tactical traders should ignore the geared Robinhood ETF going forward. As Robinhood Chain evolves, it could be a headline-generator and catalyst for short-term usage of HODU.

Wall Street is taking note of Robinhood’s broadening product base — one that could bring opportunity for traders to embrace the leveraged HODU.

On Thursday, Mizuho named the financial services stock one of its top picks for the month of July. Analyst Dan Dolev rates the stock “outperform” with a $115 price target.

“Investors have been concerned historically with HOOD’s user graduation risk (i.e. leaving HOOD for a financial advisor),” Dolev wrote in a report to clients. “We believe that the company has done an impressive job mitigating these factors through the acquisition of TradePMR (financial advisor marketplace) as well as its continued strong execution on its product road...