Robinhood Markets (NASDAQ:HOOD) stock gapped up 12.4% in Thursday premarket trading as Bernstein started coverage of the retail trading app with an Outperform rating on the expectation that a "monster" crypto cycle over the next couple years would lead to big gains in the company's crypto-related revenues.

On Wednesday, Robinhood (HOOD) said trading volumes in February rose across all asset classes on its platform, with crypto notional trading volume up 10% M/M to $6.5B. Equity and options volume were the leaders, though, with 36% and 12% gains, respectively.

Bernstein expects the total crypto market value to hit $7.5T by 2025 vs. the current ~$2.6T, potentially boosting Robinhood's (HOOD) crypto revenue by ninefold, the firm wrote in a note.

"HOOD's full suite crypto offering within a regulated broker platform is in a sweet spot, given its captive base of 11M active traders, with strong fit to trade crypto (young, active, self-directed)."

Bernstein's Outperform rate disagrees with the SA Quant system rating and the average sell-side analyst rating, both at Hold, but aligns with the average SA analyst rating of Buy.