Crypto’s Merry Band returns to Robinhood

One of the biggest names in crypto is the threat to Robin Hood’s future. 24.88%

Markets. This is reasonable. But others may think twice before settling in the Sherwood Forest.

Sam Bankman -Fried, founder of FTX, a 30-year-old cryptocurrency exchange, announced on Thursday that it has acquired a 7.6% stake in Robinhood and sent an increase in shares of online broker, up 25% on Friday. In fact, the stock is still down 40% this year, and close to 90% of the maximum price.

Some merchants may think that this is a prelude to controlling the Elon Musk-style or integrating with FTX. However, all the current indicators indicate that this is a private and passive investment for Bankman-Fried.

The nature of the offer does not preclude an active role, but Mr Banman-Fried says he does not currently want to be active and sees this as an “attractive investment”. Robinwood has a special stake in the company’s founders, which allows them to control the company’s voice, making it difficult to control.

Crypto may be in trouble for many observers, but this is the time for industry leaders and believers to be greedy when others are afraid, says Warren Buffett.

Most people, with the exception of Mr. Buffett, will probably not receive a stamp to receive more than 20 percent return in one day. But when it comes to cryptocurrencies, it is clear that the banker Mr. Bankman-Fried has an ear for the market.

Robinwood currently trades at a market capitalization of about $ 9 billion, but cash and commodities have close to $ 6 billion in assets – not to mention customers’ money and sanitation. So, if you are serious about the future of crypto, Robinhood may seem like a very valuable asset.

Although recently referred to the New York Trust Charter, FTX US currently does not offer crypto business in New York and is a popular destination for those who have not invested much time. crypto for the first time. Crypto has completely removed the bag. Robinwood recently doubled the discount he received by sending crypto orders to businesses.

Nevertheless, with declining activity, crypto trading revenue grew by only 13 percent in the first quarter. Again, this suggests that crypto trading or price correction could be very useful for Robinwood.

For the crypto-skeptical investor, however, Robinwood Road looks a long way in the future. At the end of the year, it will have to increase its average income by $ 53 to about $ 30 per quarter, according to the company, in order to help it generate revenue before interest, tax, inflation and depreciation. Active trading, the ability of non-crypto products to lead that expansion is still a question mark, although there are hopes for things like an expanded stock loan program and customer leverage.

In these difficult times for crypto, it may be wise for believers to choose a leader to follow, especially if they have a long-term perspective. But if you do not expect a return soon, Robinhood will be challenged on other dimensions.

Markets have been shaken in recent days as stock investors struggled to manage financial markets around the world and stocks, bonds and cryptocurrencies all fell. WSJ Kathleen Care looks at some of the reasons behind the recent market madness. Photo Dead Spencer Platt / Getty Images

Write Telis Demos at [email protected]

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In the May 14, 2022 issue, Crypto’s Merry Band Returns to Robinhood appeared.

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