Tag: CNBC

Breaking: Robinhood Buys Back $605.7 Million Stake from Sam Bankman-Fried in U.S. Government Deal

by Blockchain News

Robinhood Markets Inc. has finalized a share repurchase agreement worth $605.7 million with the United States Marshal Service, according to a company announcement made earlier today and CNBC report. The deal involves the acquisition of 55.3 million shares at $10.96 each, previously owned by Sam Bankman-Fried’s Emergent Fidelity Technologies. The transaction has received approval from the U.S. District Court for the Southern District of New York

Financial Implications

The $605.7 million deal represents a significant financial move for Robinhood, which had initially disclosed its intention to repurchase the stake in February of this year. The company’s board had authorized the pursuit of purchasing most or all of the stock at that time.

Market Response

Following the announcement, Robinhood’s stock (HOOD) experienced a 3.31% increase, closing at +0.36. This suggests that the market has largely responded positively to the news, although it remains to be seen how this will affect the company’s long-term valuation.

Legal Context

The approval from the U.S. District Court for the Southern District of New York adds a layer of legal validation to the transaction. It also closes a chapter on the involvement of Bankman-Fried’s Emergent Fidelity Technologies with Robinhood, following the former’s bankruptcy protection filing last year.

Background

In May 2022, Bankman-Fried had acquired a 7.6% stake in Robinhood, amounting to over 56 million shares valued at nearly $482 million.

According to a Reuters report dated January 4, 2023, U.S. officials were in the process of seizing more than $400 million worth of Robinhood shares linked to FTX.

Then the shares in question were seized and transferred to the U.S. government’s custody following the bankruptcy protection filing by Bankman-Fried’s FTX and Emergent Fidelity Technologies last year.

Robinhood’s board had approved a plan to repurchase the stake, as confirmed in their fourth-quarter report published on February 8, 2023.

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Pompliano said the market was FTX’s “judge, jury, and executioner.”

by Blockchain News

Anthony Pompliano, a prolific podcaster and investor in cryptocurrencies, maintains that he has not have lost confidence in people or in the cryptocurrency sector despite the disheartening behavior of the former CEO of FTX, Sam Bankman-Fried.

 

Bankman-Fried, who was once widely regarded as cryptocurrency’s “white knight,” is now a pariah in the cryptocurrency industry due to the “careless” mishandling of FTX customer funds and his ongoing strange behavior on Twitter. He has also admitted that the “careless” mishandling of FTX customer funds was his fault.

 

Pompliano was asked on November 17 at the Texas Blockchain Summit how to assure high-quality representation “in the corridors of power.” In response, he said that market forces eradicate bad individuals as swiftly as they kill poor businesses:

 

“It may seem a bit contradictory, but the free market is a hell of a fucking referee,” said one commentator. If you see what just occurred, you’ll see that this industry is the one who demanded accountability from the industry. “CZ is the one who brought that firm [FTX] to its knees by using the dynamics of the market,” he said.

 

On November 15, Pompliano made the following statement while appearing on CNBC: “I believe there are a lot of individuals claiming, ‘I don’t have any knowledge. I have absolutely no idea what is going on.'”

 

Pompliano also said that he had firms that had money on FTX’s platforms and that he had an advertising arrangement with the cryptocurrency exchange.

 

Together with Mark Yusko, Bitcoin advocate and entrepreneur Anthony Pompliano established the digital asset management firm Morgan Creek Digital Assets in 2018 in the state of North Carolina. Additionally, he is the proprietor of the website Pomp Crypto Jobs. As a result of his statements that the pseudonymous creator of Bitcoin, Satoshi Nakamoto, should be awarded the Nobel Peace Prize, his advocacy for the inclusion of cryptocurrencies in pension funds, and his dismissal of the energy consumption of cryptocurrency mining with the statement that “crucial things in the world use energy,” he has garnered a lot of attention.

 

Before FTX invested $680 million in BlockFi as part of a rescue in July, reports indicate that Morgan Creek Digital Assets was working on putting together an alternative bid for the cryptocurrency lender.

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It is High Time to Rethink Holding Strategies as FTX Crisis Roams, Says Blockchain.com CEO

by Blockchain News

Speaking on CNBC’s “Closing Bell” Thursday, Peter Smith deemed the collapse of crypto exchange FTX as “a tragedy and total failure of governance.”

The CEO and co-founder of crypto exchange Blockchain.com noted that there is a need for crypto investors to go back to the drawing board and hold their assets on their own private keys.

Smith explained:

“Crypto is one of the very few assets in the world that you can custody yourself, and I think we’re going to see folks increasingly move back to that model as well as move to a model of trusting regulated companies in the space.”

He added:

“The ultimate reality and the coolest part of crypto is that you can store your funds on your own private key where you have no counterparty exposure.”

The liquidity crisis facing FTX will also include various measures incorporated into the crypto ecosystem, the Blockchain.com CEO pointed out. 

For instance, a trend towards regulated cryptocurrency institutions will be the norm, and more crypto investors will emphasise corporate structure.

Smith highlighted that FTX was significantly popular within Silicon Valley-based groups. As a result, it did not emphasise the cryptocurrency economy significantly. He noted:

“This was very much a Silicon Valley momentum play, and we’ve seen that very clearly not work out.”

Some analysts believe Coinbase will be among the major beneficiaries when the greater focus is on regulated crypto entities. 

The proof-of-reserves concept is also making circles in the crypto space with the aim of rendering more transparency, Blockchain.News reported.

A proof-of-reserve uses a Merkle or Hash tree for data verification, synchronisation, integrity, and transparency purposes. “What is Proof-of-Reserves? An audit by a 3rd party ensuring that a custodian holds the assets it claims to. A snapshot of all balances held is taken & aggregated into a Merkle tree, a privacy-friendly data structure encapsulating balances,” Crypto exchange Gate.io explained.

Binance CEO Changpeng Zhao (CZ) prompted the proof-of-reserves trend because it would propel more transparency in crypto exchanges by pointing out their digital asset holdings. 

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A Rising Rate Environment will Tilt from Bonds to Crypto, Says Fundstrat Founder

by Blockchain News

Speaking on CNBC’s Crypto World Monday, Thomas (Tom) Lee, the founder of equity research firm Fundstrat Global Advisors, opined that with interest rates being on a reversal after experiencing a 30-year decline. 

This is a game-changer for crypto because other investments like bonds will become less attractive. Lee noted:

“That means for the next 10 years, you’re guaranteed to lose money owning bonds… that’s almost $60 trillion of the $142 trillion [of U.S. household net worth].”

He suggested that the $60 trillion would find its way into the crypto sector to earn yield. 

“The obvious thing is it rotates into stocks like FAANG, but I think what is more likely is a lot of speculative capital from equities… it’s really going to be tracing its roots to a rotation out of bonds and it’s going to eventually flow into crypto.”

The market expects the United States for the upcoming rising interest rate hike, with the latest Consumer Price Index (CPI) standing at 7.5% year-over-year. 

Lee, however, acknowledged that an open mind is of the essence in the crypto market based on the volatility experienced. He stated:

“Unless someone really has a crystal ball, it’s very difficult to be precise in crypto. Drawdowns of 40% are really common and bitcoin makes most of its gains in 10 days in any single year. It’s tough to be too precise with crypto. It’s wide lanes.”

Crypto has emerged as an alternative asset class, having experienced significant diversification beyond trademark cryptocurrencies, like Bitcoin (BTC) and Ethereum (ETH), in the last two years.

Some of the new members become active in the cryptocurrency family, such as block decentralized finance (DeFi), stablecoins, and non-fungible tokens (NFTs). Nevertheless, these new assets have to stand the test of time so that investors can gain confidence in them as they have in Ethereum and Bitcoin.

A recent study by blockchain firm Paxos noted that consumers were changing their minds because they were treating crypto as ideal investment vehicles. 

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Australian Football League Bags $25 Million Sponsorship Deal With Crypto.com

by NEWSBTC

Sponsorship deals have become part of the measures that crypto-related companies employ in widening the knowledge and acceptance of cryptocurrency, one of the recent deals in the Australian Football League (AFL) and Crypto.com.

Most of these sponsorships have been on sporting teams, with more football and basketball.

This deal comes as the number 1 primary crypto sports sponsorship for AFL as this deal with Crypto.com will be backing its women’s league (AFLW).

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The sponsorship deal, about $25 million, is expected to last for five years. It depicts an increase from the current $18.5 sponsorship contract AFL has with Toyota.

Related Reading | Solo Ethereum Miner Hits The Jackpot With 170 ETH For Mining A Block

This Crypto.com partnership with AFL represents its first sponsorship for an Australian sports team. Also, it stands as the initiating move from the crypto exchange in supporting an elite women’s sports competition globally.

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Reacting to the milestone created by the sponsorship, Kylie Rogers confirmed that she is proud to be a part of it.

The general manager said that the AFL is proud of receiving the honor as the first Australian Sports league and the global elite women’s competition to partner with Crypto.com. She stressed their excitement in working with a company with the same passion. And for the progress and sustainability of elite sports and technology.

Reason Behind Sponsorship Deal With Crypto.Com

Karl Mohan, the general manager of Asia and Pacific of Crypto.com, is on his part. He revealed that his company’s attraction came from the high volume of interested women in cryptocurrency.

Mohan stated that their latest research on their Australian customers revealed female investors in cryptocurrencies were over 53%. The general manager mentioned that such a discovery is quite encouraging.

According to Mohan, this indicates that crypto adoption in Australia cuts across all levels without any inhibition from either gender or background. So, Crypto.com is pleased to serve as their beck-on-call platform for any of their crypto-related activities.

In August, a survey from CNBC disclosed that women’s participation in crypto investments is far below half of their male counterparts. The report indicated that while 16% of men were involved, only 7% were recorded.

The Singapore-based crypto exchange, Crypto.com, provides many crypto services to its customers. These include digital wallets, crypto-backed debit cards, and others.

In addition, the crypto exchange has had several sponsorships deals from sports brands within the past few months which amounts to more than $1.5 billion.

Related Reading | Bitcoin Implied Volatility Plummets To Pre-Bull Market Levels: What This Means

Crypto.com, in June ending, bagged a $100 million sponsorship deal with Formula 1. This was followed closely with its July partnership with the UFC worth over $175 million.

Furthermore, mid-November saw the company with a new agreement of renaming the Staples Center in Los Angeles to the Crypto.com Arena. The deal worth over $700 million is expected to cover the next 20 years.

Australian Football League Bags $25 Million Sponsorship Deal With Crypto.com
The total crypto market cap stays below $2 trillion | Source: TradingView.com

Featured image from Pixabay, chart from TradingView.com

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Bitcoin is Still on Track of Hitting $100K in the Long Term, OKCoin CEO says

by Blockchain News

Speaking on CNBC Capital Connection Wednesday, Hong Fang, the CEO of crypto exchange OKCoin, opined that Bitcoin reaching $100,000 would not be a problem in the long term.

Fang acknowledged that time was of the essence in Bitcoin’s journey towards $100K. She pointed out:

“I still believe that the $100,000 price point is reasonable, but the timing can be a bit elusive because we are at the mercy of market dynamics … so I think there’s a lot of elements playing out in the short term, but long term I still think that getting to $100,000 or even a higher price shouldn’t be a problem.” 

She added that the short-term dynamics had to come up because Bitcoin is competing with other assets for capital in the crypto space. 

The psychological price of $100,000 has become an ideal target for various pundits, investors, and traders in the BTC market. For instance, earlier this year, El Salvador President Nayib Bukele disclosed his bullish forecasts that Bitcoin would breach the $100K level in 2022. 

Bitcoin jumps as inflation increases in the United States

Following the release of data showing that the US Consumer Price Index (CPI) reached 7% in December 2021, Bitcoin rose by approximately 3.1% to hit the $44,000 level on January 12.

Therefore, showing that inflation on American soil recorded the highest annual gain since 1982. This reignited the inflation hedge argument about Bitcoin. 

Whenever inflation levels go up in the United States, a trend is being witnessed because BTC price usually surges. For instance, in November last year, as the inflation rate reached a 30-year high of 6.2%, Bitcoin hit an all-time high (ATH) of over $68,000. 

The leading cryptocurrency had retracted to the $43,805 level during intraday trading, according to CoinMarketCap.

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A third of Americans to buy Bitcoin by end of 2022, says Ric Edelman

by Cointelegraph

Bitcoin bull and founder of Edelman Financial Engines Ric Edelman has made some promising predictions about the future of the seminal cryptocurrency.

In an interview on CNBC program ETF Edge on Jan. 10, Edelman said:

“We’re already at a quarter of that number with 24% of Americans owning Bitcoin. It won’t be that much of a stretch for it to get to one-third. Bitcoin is becoming more and more mainstream. People are hearing about it everywhere–it isn’t going away.”

While 2022 got off to a rocky start, In his view, governments corporations, foundations, pension funds are investing in BTC: “there is major institutional involvement.”

As the author of soon-to-be-released “The Truth about Crypto,” Edelman is a long-standing crypto proponent. In 2019, he described Bitcoin as the first “genuinely new asset class” in 150 years, and back in December 2018, he recommended that investors load up on the orange coin.

In a follow-up interview with CNBC yesterday, he lamented that while he has predicted a Bitcoin spot exchange-traded fund (ETF) for the past seven years, he’s convinced that by 2023, there will be spot ETF approval.

Similar to U.S. Securities and Exchange Commissioner Hester Peirce’s thoughts on the matter, Edelman articulates that the SEC is running out of excuses to say no:

“A lot of the concerns the SEC has have been resolved by the industry through their own maturity, innovation and development. I am confident that we will see the SEC say yes because there is no legitimate reason for them not to.”

Matthew Hougan, chief investment officer at Bitwise Asset Management agreed with him in the second interview.

Related: Crypto mainstream adoption: Is it here already? Experts answer, Part 1

Hougan stated that there would be even more investor protections and a better product thanks to the “cumulative weight of the evidence that will force them to move forward with approval.” Consumer protection provided by an SEC-run ETF is the cherry on top of a slick product.

ETF speculation aside, Edelman is clairvoyant about the banality of Nakomoto’s invention in the future. He summed it up succinctly; Bitcoin is “going to be as common in the next couple of years as any other portion of a portfolio.”