The Crypto Catalyst: Why November Holds the Key for HOOD Stock

Stock Market

Robinhood Markets (NASDAQ:HOOD) changed the way many people buy and sell stocks. Its crypto connection could catalyze HOOD stock in 2023’s final quarter, but a crucial day is coming for Robinhood.

The company has faced regulatory hurdles this year, and the company’s co-founder and chief creative officer, Baiju Bhatt, sold 90,021 Robinhood shares earlier this month. Investors shouldn’t worry, he still owns over 402,400 shares of HOOD stock. Don’t lose faith in the company, either, just wait until November before making investment decisions.

Bitcoin Booms: Is HOOD Stock Next?

What do Robinhood and cryptocurrency have in common? They’re both closely scrutinized by regulators in the U.S., especially the Securities and Exchange Commission (SEC) under its current chairman, Gary Gensler.

Yet, recent events showed that the SEC might finally start to relax its strict stance on cryptocurrency. There might even be a spot Bitcoin (BTC-USD) exchange traded fund coming soon.

If the SEC can ease up on cryptocurrency, maybe the agency can also soften its stance on Robinhood. Furthermore, Robinhood should benefit from the recent rise in the Bitcoin price.

When Bitcoin rallies, trading volumes are bound to increase. That’s good for Robinhood, which allows its users to buy and sell Bitcoin and a selection of other popular cryptocurrency tokens.

Don’t Make Your Move Until This Crucial Date

HOOD stock is still significantly down from its July peak of $13. Hence, you may want to buy shares today because of the potential crypto catalyst.

That’s understandable, but don’t make your move yet. It’s wise to wait, as Robinhood is set to release its third-quarter 2023 financial results after market closes on Tuesday, Nov. 7.

So actually, it makes sense to wait until Nov. 8. Sure, Robinhood achieved its first profitable quarter in this year’s second quarter, but the company needs to demonstrate some follow-through in Q3.

Investors should want to find out how impactful Robinhood’s regulatory costs will be in the third quarter. People should expect that Robinhood will sustain at least $100 million worth of costs related to regulatory issues.

Investors should be on the lookout for trends in Robinhood’s monthly active users (MAU), which appeared to be declining recently. In its third-quarter earnings report, Robinhood needs to send a loud-and-clear message that its user base isn’t deteriorating.

HOOD Stock: Wait for More Information

Nov. 7 will bring more information about Robinhood’s progress, both financially and in terms of the platform’s user count. Thus, prudent investors can wait until Nov. 8 before making any assessments of Robinhood’s future prospects.

That said, it’s certainly bullish for Robinhood that Bitcoin is booming. Prospective investors should keep that catalyst in mind and then mull the upcoming quarterly data before considering a share position in HOOD stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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