Robinhood Is a Bitcoin Whale. What It Means for the Stock.
Robinhood Markets, the discount brokerage, owns one of the largest Bitcoin wallets in the world, indicating its significant presence in the cryptocurrency trading market.
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Posted 8/28/2023, 8:47:00 PM
barrons.com
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In a surprising turn of events, Robinhood is speculated to be the owner of a significant Bitcoin address, highlighting the potential influence of traditional financial institutions in the cryptocurrency market. However, concerns arise regarding the risks associated with Robinhood's user base and potential government intervention.
Bitcoin's recent surge in value may be attributed to a $10 billion investment by whales, Robinhood's involvement in a $3 billion Bitcoin purchase, and JPMorgan analysts predicting an end to the crypto bear market.
Robinhood holds over $3.2 billion worth of bitcoin in a single wallet, making it the third-largest bitcoin holder globally, behind Binance and Bitfinex.
Robinhood has ended its business relationship with market-maker Jump Trading as the firm faces increased regulatory scrutiny and is reportedly backing away from the US market.
Robinhood expands its crypto wallet to include support for bitcoin and dogecoin, allowing users to send and receive these cryptocurrencies in addition to ether and tokens built on the Ethereum blockchain. They also introduce swap features for select users to trade ether for over 200 different assets.
Robinhood has entered into a $605.7 million share repurchase agreement with the United States Marshal Service to buy back stock from Sam Bankman-Fried's Emergent Fidelity Technologies.
Insiders at Robinhood Markets have been selling more shares than they have been buying, with the recent sale by Daniel Gallagher being the largest in the past year. While high insider ownership suggests alignment with shareholders, the selling activity leaves some caution.
Despite the historically weak performance of the stock market in September, now might be a good time for investors to seek out discounted stocks, with Bill.com being a potential stock to buy due to its strong growth and expanding market, while Robinhood Markets might be a stock to sell due to its declining customer base and reliance on a revenue model that is banned in major Western countries.