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Jul 23 Trading Analysis: If only Robinhood has ETH listed

Trading Crypto with Eugene is a series of daily commentary of market analysis and trading advice shared by Eugene Ng of Matrixport, a veteran trader with 10 years of experience in top-tier global investment banks. If you like the article, please follow us here on Blockchain.News so you won’t miss our future publications.

Thanks to the Office of the Comptroller of the Currency letting all nationally chartered banks in the U.S. to provide custody services for cryptocurrencies, the crypto world skyrocketed with ETH performance the talk of the town. ETH up a whooping 8% in the past 24 hours on momentum (MoMo) heading into ETH 2.0 testnet on Aug 4 as well as China’s state-backed Blockchain-based Service Network (BSN) integrating with six public chains including Tezos, NEO, Nervos, EOS, IRISnet and Ethereum (announced 2 days ago). In fact, ETH’s move has some decent volume backing it up with open interest (OI) across major exchanges near yearly highs as well as record OI in ETH options. Whether you want to buy into MoMo, I will leave it up to you, my thesis continues to be that “its mostly recycled capital in the space moving into ALTs (non-BTC coins)” so the most logical way to participate is through buying ETH Calls $300 to $350 for the next few weeks. If we had the equivalent of an Elon Musk or Robinhooders in ETH, I would have almost certainly been more confident in the move. Unfortunately, ETH’s biggest setback has always been “a bunch of geeks” who aren’t really about marketing and missing “deadlines of deliverables”.

Stock markets around the world continue to remain buoyant with Miracle Drug narratives, EU Summit a success (yawn and EUR 1.15 break) and gold (& silver) flying. More so now with EV iron man Musk’s Tesla beating consensus which qualifies the company into S&P 500. It’s all about MoMo for $TSLA, we will just have to see how much of that has been already priced in. This is why crypto is trading firmer but also why I believe we won’t see much inflows until cross asset volatility starts to decline sufficiently such that it makes crypto vol more interesting. Trade strategy: Buy out of the money BTC and ETH calls; BTC 10 to 10.5k calls and ETH 300 to 350 calls for the next few weeks. Let’s not get ahead of ourselves; whether we actually FOMO and chase, we will have to monitor for continued “recycled capital” and hopefully fresh inflows to keep the MoMo going. CME listed BTC futures did increase 16% on Monday for OI, so let’s see if these “fresh inflows” have some MoMo legs that could manifest into FOMO. Gdluck.Technically speaking, we need to close above $9,800 for a clear path towards the moon. Otherwise, we are still at risk of a move lower… so stay calm bulls, and be safe bears…

Dai’s supply is shooooooting up over 40mil thanks to DeFi growth resulting in uptick in the ETH-based stablecoin.

ETH December options has the highest Open Interest…. clearly indicating that investors are looking for a lotto potential surprise in ETH 2.0 this year, but let’s be real, it’s going to happen only early next year as recently announced…. All that time decay….

What fundamentals? Forget intellectual debates or discounted cash flow valuations, you only need to know how to trade like Robhinhood. This is MoMo style trading. So many HF managers wish they were like Robinhood users… I only wish they knew when to start selling…

DisclaimerOpinions expressed are solely the analyst’s own and do not express the views of Matrixport the company.The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

eToro Plans to Launch Debit Card in UK Ahead of Robinhood

Investment app eToro has acquired Marq Millions Limited, the UK based e-money business, to launch its debit cards to UK customers.

Marq Millions will now be rebranded as eToro Money and would be the issuer for eToro’s debit cards as the exchange expands its range of products for UK customers.

Strategy to Take on Rival

The cards would be initially available to eToro customers in the UK, then expanded to Europe, and later would be extended to non-eToro users in other markets. eToro expects the debit card take-up to be strong.

eToro Money has an EMI license permission from the Financial Conduct Authority (FCA) and a principal membership with VISA.

eToro co-founder and CEO, Yoni Assia, said that the commitment to launch a debit card is a natural step that eToro undertakes to broaden a variety of services that it offers to its customers. The CEO mentioned that the debit card would provide instant cash-in and cash-out functionality, a feature that the company’s user-base has been requesting for a long time.

eToro allows customers to invest in commodities and stocks, as well as for cryptocurrencies like Bitcoin. The company says that it has 14 million registered customers, all of whom share their investment strategies, the same way as a social network. The firm is regulated in Australia by the Australian Securities and Investments Commission, in the UK by the Financial Conduct Authority (FCA), and by the Cyprus Securities and Exchange Commission in Europe.

Meanwhile, eToro is racing to build up its user base in the U.K ahead of a potential launch of a rival new product by competitor Robinhood. The US-based investment app Robinhood has made waves in the United States but has delayed its launch in the U.K indefinitely as it struggles to address pressure from U.S politicians after one of its customers killed himself. The customer, a 20-year old student, Alex Kearns, killed himself last month, apparently in the mistaken belief that he had lost £575,000 ($730,000) by using the app.

In the recent past, Robinhood said that it had a waiting list of over 250,000 people in the U.K ahead of a planned launch for this year. This clearly indicates that there would be a strong demand for eToro’s services.

Card Race Is Heating Up

Fintech companies are racing to develop their own virtual and physical debits cards. Their cards and associated checking accounts seek to enable users to purchase things with a card, smartphone, or online. The debit cards are connected to apps with new features that allow users to easily check their balance, monitor their purchases, and lock their accounts. The apps allow online and peer-to-peer payments by connecting physical debit cards. By developing smart debit cards, these companies have the opportunity to unlock new streams of data and revenue. They could charge interchange fees on purchases made with debit cards or other checking account fees and then split with their business partners.

Robinhood Compromised as Dark Web Hackers Allegedly Hold More Than 10K Login Keys

More than 10,000 Robinhood trading accounts have allegedly been breached, but despite complaints from customers, it appears as though the brokerage has not acted on it.

According to a report by Bloomberg on dark web marketplaces, more than 10,000 login keys linked to Robinhood accounts were up for sale on the darknet market. Speaking about the hack suffered by the trading platform, Eli Dominitz, the CEO of cyber intelligence firm Q6 Cyber, observed that the amount of Robinhood-related emails for sale were 5-to-1 compared to other brokerages, an implication that Robinhood accounts were easy targets for hackers. He further added:

“If they feel that Robinhood gives them greater upside than trying to steal money from Bank of America, that’s what they’re going to do.”

Though customers of the investment and trading application have complained that their emails have been hacked, the company has stood by the belief that “a stolen email alone isn’t enough to compromise a brokerage account.”

As shared by Bloomberg, Robinhood assured its customers that security measures were rigid and encouraged them to use two-factor authentication to secure their accounts. Although the stocks and trades platform was reported to have increased their customer service team, it appears as though clients have still been unsatisfied with the way Robinhood has dealt with the security breach.

Speaking about his experience, one customer expressed his dissatisfaction and reported that his problem was only solved after he was locked out of his account for more than a month.

The stock investment platform was not the only brokerage that Bloomberg included in its overview of dark markets. The report by Bloomberg found that nearly 1,000 TD Ameritrade Holding Corp. accounts were also compromised, and financial credentials were sold on a dark market called SliPP.

The emergence of dark web markets

A recent report from CipherTrace found that despite the number of dark markets that have been shut down lately, new ones have emerged, as dark web platforms are relatively easy to launch and generate a great amount of profit. On these platforms, illicit goods from drugs, malware to login credentials are sold by vendors. Often, most transactions are conducted with cryptocurrencies, such as Bitcoin and Monero.

Currently, the largest worldwide dark web market is estimated to be Hydra, a Russian-based darknet behemoth that is reported to have generated more than $1.2 billion in revenue.

Robinhood to Roll Out New Features for Dogecoin and Other Cryptocurrencies as GameStop Hearing Looms

Robinhood announced its intention to implement cryptocurrency deposits and withdrawals. Currently, although certain cryptocurrencies could be traded on the platform, customers are unable to access the funds or transfer them to other digital wallets.

Per Robinhood’s announcement:

“So much interest in Crypto! To be crystal clear, we fully intend to provide the ability to deposit and withdraw cryptocurrencies, including DOGE. Robinhood Crypto does NOT currently invest in cryptocurrency or use any customer cryptocurrency for our own benefit.”

Robinhood also rectified that cryptocurrency deposits will be held in digital wallets custodied by the firm. However, it clarified that it did not use client funds for its own gains.

Currently, Robinhood offers a total of seven cryptocurrencies on its trading platform, namely Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Litecoin, and Ethereum Classic.

Game Stopped?

Robinhood’s addition of new cryptocurrency features to its trading platforms come at a time when centralized financial systems have increasingly been criticized for the excessive power and control it holds over consumers.

The US-based trading platform recently came under fire for stopping the purchases of several hot stocks that were skyrocketing in January following the collaborative action of Redditors from the forum WallStreetBets to boost GameStop and AMC shares. Following this, purchases of GameStop (GME), AMC (AMC), and Blackberry (BBE) were halted on Robinhood, spurring anger from many who criticized Robinhood for being impartial and acting in a way that will benefit institutional short sellers but harm the average retail investor.

Robinhood cited “extreme volatility” as a reason for its decision to halt purchases of the hot stocks. Currently, a hearing is to be held on Thursday, February 18, through which the US Congress will discuss with Robinhood and Reddit executives about what went down.

Prior to this, Robinhood had already been criticized both by regulators and customers for limiting the purchase of a handful of securities running on its platform.

Chinese Robinhood Futu & Tiger Brokers To Expand Crypto Trading Abroad

Two Chinese online brokerages reportedly intend to expand their business into the cryptocurrency trading market abroad against their rival stock competitors app, such as Robinhood in the U.S.

In a CNBC’s report on Monday, two trading platforms, Shenzhen-based Futu and Beijing-based Tiger Brokers are applying for licenses in Singapore and the U.S. They allow them to start trading cryptocurrencies at local markets, as revealed in earning calls last month.

Futu and Tiger Brokers, which are considered Chinese Robinhood, reportedly are shifting their targets, focusing on the overseas market and offshore clients outside mainland China.

According to CNBC, Arthur Chen, Chief Financial Officer of Futu, told CNBC last week that Futu has gained 100,000 paying clients in Singapore less than three months since launching in early March. Chen emphasized that one-fourth of new paying clients in Q1 came from the U.S and Singapore. Meanwhile. These two platforms face multiple competitors such as Robinhood and traditional rivals, like Interactive Brokers. Futu & Tiger Brokers both parties were added to MSCI stock indexes last week, attracting trillions of global investment capital.

However, Chinese regulators recently tightening supervision on Bitcoin (BTC) mining activities and other cryptocurrencies, banning Yuan-BTC transactions due to financial and environmental risks concerns, leading to a crackdown on the crypto market. Three major regulatory bodies, including the National Internet Finance Association of China (NIFA), the China Banking Association (CBA), and the Payment and Clearing Association of China (PCAC), requested not to offer any crypto services to clients in mainland China.

Robinhood Files for US IPO, Says Crypto Transactions Accounts for 17% of Revenue

Zero-commission financial trading platform Robinhood has filed for an IPO in the US amidst a growing sect of brokerages exploring public listings. Robinhood, known for charging zero commissions to its traders, has room for cryptocurrencies, a growing asset class that accounted for 17% of the firm’s total revenue.

While Coinbase was the first pioneering exchange that went public this year, several crypto trading platforms are now also considering betting big on the attempt to go public. Robinhood is next on the list of crypto backers to file an IPO, while the duo of Kraken and eToro are reportedly working out a game plan in this regard.

Per the Robinhood push to trade on the NASDAQ bourse, the platform’s public listing plans come amid a growth in the demand for cryptocurrencies from retail and institutional investors. As of the end of March, the company said it has $11.6 billion worth of assets in crypto held on behalf of its customers.

Robinhood markets cater to financial assets and other traditionally tradable commodities. However, crypto has found a way to climb up the ranks. The digital assets supported by Robinhood, Shiba Inu-themed coin, Dogecoin (DOGE) account for the largest percentage of total crypto revenue. Dogecoin-based revenue came in at 34% of all cryptocurrencies.

The firm believes that a decline in the demand for Dogecoin can impact its growth significantly. “If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies on our platform, our business, financial condition, and results of operations could be adversely affected,” the firm said in its filing with the United States Securities and Exchange Commission (SEC).

Dogecoin’s popularity was fueled by Tesla’s Chief Executive Officer Elon Musk, who hides that the cryptocurrency is his best digital asset. Musk has even picked the cryptocurrency over Bitcoin and often shares tweets about the coin, a move many believe are promotional in nature.

Based on the coin’s popularity, its utility as a currency is beginning to build up.

Robinhood Warns About Potential for Significant Decline in Retail Trading, Particularly in Crypto Business

Robinhood Markets Inc. has warned of a potential decline in trading revenue and new clients as the boom in retail investing begins to slow down. The US investing and trading platform is expected to go public as soon as next week.

“We expect our revenue for the three months ending September 30, 2021, to be lower, as compared to the three months ended June 30, 2021, as a result of decreased levels of trading activity relative to the record highs in trading activity, particularly in cryptocurrencies, during the three months ended June 30, 2021, and expected seasonality,” Robinhood stated in an amended prospectus released Monday.

According to its prospectus, Robinhood estimates the revenue of Q2 ended in June 2021 to range between $546 million and $574 million. This would increase 129% from the $244 million in the Q2 of 2020. However, the firm estimates a net income loss between $537 million and $487 million in the Q2 of 2021, compared with a $1.4 billion loss in Q1.

Robinhood, which provides cash management accounts and crypto, equity, and options trading, benefits more from speculative trading activities from its customers.

The company further mentioned that while options trading contributes about 38% of its total revenue, crypto trading accounts for 17% of the revenue. The firm also acknowledged that the levels of its stock and margin lending trading had increased this year.

However, as RobinHood is heading toward its public debut within the next few weeks, a stagnation in crypto, options, and margin trading could hurt its growth.

The firm stated that it expects the growth rate of its new customers to decline in the third quarter that ends in September 2021, compared to the second quarter because of a potential decline of interest in crypto trading.

Robinhood Crypto Trading

Early this month, Robinhood filed a preliminary prospectus with the US Securities and Exchange Commission (SEC) for its initial public offering (IPO).

The firm lists crypto trading through its subsidiary, Robinhood Crypto LLR, as one of the offerings on the Robinhood platform. Robinhood, which provides commission-free selling and buying of crypto assets through the subsidiary, launched its crypto trading services in February 2018.

Currently, the platform supports seven crypto tokens, including Bitcoin, Ethereum, Dogecoin, Litecoin, Ethereum Classic, Bitcoin SV, and Bitcoin Cash. This year, Robinhood held crypto assets worth almost $11.60 billion in assets under custody for the first three months.

The filing details indicated that 17% of the company’s total revenue was generated from transaction-based revenues earned from crypto transactions, compared to 4% from the three months ended December 2020.

However, the company now expects a decline of interest and adoption of crypto assets, which would lead to declined customer interest on its platform in the third quarter, adversely affecting its earnings.

The booming yet controversial Robinhood trading app plans to raise $2.3 billion in the upcoming initial public offering. The company, which plans to list on the Nasdaq public stock market under the ticker symbol “HOOD,” expects selling shares for between $38 and $42 apiece.

That would translate the market valuation of Robinhood between $27 billion and $35 billion. And that would make the firm more valuable than about two-thirds of the S&P 500, putting it somewhere between HP, Corning, and Yum Brands.

Robinhood is poised to become a hot IPO because it proliferates as retail investors get attracted to the stock market boom.

Robinhood Explores New Feature to Protect Investors from Crypto Fluctuations

Zero-commission financial trading platform Robinhood is exploring a new feature designed to protect investors from price fluctuations during investing in cryptocurrency trading.

According to a Bloomberg report, Robinhood is studying price fluctuation protection mechanisms to protect the interests of investors against the unpredictable high volatility of cryptocurrency prices based on the code of the iPhone app test version discovered by iOS developer Steve Moser.

The code shows:

“To protect your orders against price volatility, we may sometimes skip your recurring orders or buy less than your chosen amount.”

A spokeswoman representing Robinhood declined to comment.

In addition, American financial technology and financial services company Robinhood is developing an option called “comprehensive investment” through which investors can invest their debit or credit card change in designated stocks.

Robinhood said that at present, investing in small change has become a prevalent strategy for novice stock investors, and it is also an important market that competes with trading platforms such as Acorns, Chime and Wealthsimple.

The Chief Financial Officer Jason Warnick said that on the firm’s growth strategy:

“There is more we can do with direct deposit and debit cards, particularly given the opportunity to connect rewards with our brokerage and crypto offerings.”

According to the files from financial trading platform Robinhood for an IPO in the US amidst a growing sect of brokerages exploring public listings, Robinhood, known for charging zero commissions to its traders, has room for cryptocurrencies, a growing asset class that accounted for 17% of the firm’s total revenue.

Zero-commission Trading Platform Robinhood is Valued at $32B amid IPO Prices at $38 per Share

The popular stock and cryptocurrency platform Robinhood’s initial public offering (IPO) is valued at $38 per share at the low end of the previously estimated price range of $38-$42, with the company’s market value up to $32 billion.

According to a CNBC report Wednesday, Robinhood will publicly issue under the code of “HOOD” on Nasdaq in the United States and will issue 55 million shares at the low end of expectations at $38 per share.

It is reported that this Robinhood listing is the seventh-largest IPO in US stocks this year. The IPO issuance is led by the investment banks of Goldman Sachs and JPMorgan Chase.

Its public prospectus on July 1 disclosed its relevant financial situation, which shows that Robinhood turned a loss to profit in 2020, with its 2020 net revenue of $959 million and a net profit of $7.45 million compared to last year’s data——a net loss of $107 million.

As of the second quarter of this year, its platform has more than 22.5 million active users, and it is predicted that 2021 Q2 revenue will be in the range of approximately $546 million to $574 million, nearly twice the quarterly revenue of $244 million in the same period last year.

Robinhood is unanimously committed to providing more thoughtful services to young and first-time investors. As reported by Blockchain. News on July 28, Zero-commission financial trading platform Robinhood is exploring a new feature designed to protect investors from price fluctuations during investing in cryptocurrency trading.

Robinhood Introduces Cryptocurrency Recurring Investments

Robinhood Markets Inc. is launching a new cryptocurrency recurring investment feature that lets customers automatically invest in cryptocurrencies in a daily, weekly or monthly schedule.

The US financial services company stated that such a service would let customers automatically invest in cryptocurrencies like Bitcoin, Ethereum, Dogecoin, and other supported crypto tokens without a commission fee.

The new feature is set to allow its customers to purchase cryptocurrency commission-free and with a little as $1 worth of cryptocurrency of their choice monthly, weekly or even daily.

Christine Brown, the Chief Operating Officer of Robinhood Crypto, talked about the development and said that the ability of customers to buy small amounts regularly is especially useful when it comes to the especially volatile crypto markets.

Brown stated that the new feature for Robinhood’s cryptocurrency product will allow customers to autonomically make investments in the market on a recurring basis and help to reduce the impact of cryptocurrency’s volatility by allowing investors to invest in intervals rather than in large lump sums – a popular strategy known as dollar-cost averaging.

“Dollar-cost averaging encourages investing money gradually at regular intervals, rather than all at once and regardless of where market prices stand, to help smooth out the price swings that can sometimes occur,”

Brown further mentioned that the recurring purchase feature would especially appeal to investors new to cryptocurrency and intimated the market’s frequent crashes, like on Tuesdays September 7, Bitcoin and Ethereum plunged their values by as much as 15% before partially recovering.

“The crypto markets can be volatile due to the nature of the industry. Investing on a recurring basis can help you focus on long-term growth, reduce risk, and reduce the stress of timing the markets,” Brown said. “This allows customers to take a long-term approach to crypto,” she added.

The product is now available to a number of select users on the RobinHood investment platform, beginning Wednesday, September 8.

Robinhood is not the only cryptocurrency platform that allows users to invest automatically. Rival competitors, such as Coinbase and FTX.US also provide similar features.

However, during the announcement of the new feature, Robinhood stated that any recurring feature would come with no fee or commission, contrasting this to other cryptocurrency platforms where transaction fees can be up to 4%. The comment may have targeted Coinbase, the largest cryptocurrency retail service, which charges a fee on every transaction and is working to be Robinhood’s biggest strategic rival.

Making Crypto Trading Easy

After assisting a new generation of investors in getting into stock markets, RobinHood is increasingly doing the same for cryptocurrencies. And its investors appear to love cryptocurrencies.

In its first earnings report as a public company, Robinhood stated that cryptocurrency trading accounted for 52% of its main source of revenue, and Dogecoin made up 62% of cryptocurrency trading volume.

During the spring, more than $4 of every $10 that the firm made in revenue came from customers trading Dogecoin, Bitcoin, and other crypto-assets.

Due to such impressive results, RobinHood stated that it wants to make it easy to trade any asset its customers are interested in, which increasingly means cryptocurrency.