🧜 FTX on fire, about to buy Robinhood
We talk about the potential of FTX buying Robinhood and Voyager issuing Notice of Default to 3AC
gm degens 🤑
It has been a while since we have kinda established support levels on the crypto space. We have BTC sitting at $21k and ETH at $1.2k. There is hope for better days. Although fear is still out there. People panic sell whenever they see something big players struggling in the space, especially with the liquidations going on as BTC hits new lower levels. Whether prices will go up or down (i.e potential for speculation purposes), that we can not really predict, but the blockchain technology is here to stay with us.
Let’s see what do we have for lunch today.
🧜 FTX on fire, about to buy Robinhood
🧟♀️ Crypto Broker Voyager Issues Notice of Default to Three Arrows
🦜 Other news in the space
🧜 FTX on fire, about to buy Robinhood
It is no secret that FTX has been flourishing as a company during those times, at least when compared to their competitors. While their competitors lay off staff, they have been on a hiring spree. A month ago, FTX came out with an announcement that they will expand their platform and offer stock trading as well. Little we knew, they were on a shopping spree to buy existing platforms as well.
It appears to be that they were interested in buying Robinhood. Yes, the platform which entirely changed the scope of trading and brought a fee free (kinda) platform to the retail investors. Overall mergers and acquisitions have proven to be successful in the tech space.
Big corporations that buy existing businesses are mainly for two purposes:
buy them and shut them down, less competition
buy them and slowly incorporate them in their existing business model.
While the first one seems to be counterintuitive, it has proven that actually can be quite successful. The latter is more common. You have examples of Google buying YouTube or Facebook buying Instagram.
It appears that FTX is acting as a big player here. Most likely they will go with the second alternative. Either operate as a separate entity for a while or slowly incorporate both of platforms in one place (of course if acquisition happens).
It has been a habit for big corps to go after stressed companies. Companies that might have short-term liquidity problems but the overall underlying business is healthy. While Robinhood has no liquidity issues, they market cap shrunk by a lot. Last year, it had a $45 billion market cap while currently it is valued at ~10 billion. Last month, Sam Bankman-Fried (CEO and founder of FTX) bought 7.6% stake in Robinhood (roughly $650 million).
He is kinda following the same path like Elon did with Twitter. The stake he got with Robinhood can put some pressure to the management board from their shareholders to sell the platform if the premium paid is worth it.
This can go two ways (both benefit to Sam):
He already got a stake on Robinhood. People trade on news. Robinhood stock price is up 14% already. Sam made $91 million already.
He is genuinely interested to buy and the acquisition happens. Robinhood has already proven themselves (22 million users already).
This would be also a good alternative for FTX to enter the US market as it is one of the largest cryptocurrency exchanges in the world, but yet they do not offer services in US. Such platform as Robinhood, would offer them a way to enter the US market and then slowly expand their crypto exchange in the US market. Robinhood has already their own crypto wallet which was released for a small list of users.
One thing is for sure, Sam is on fire!! I mean..see below..
🧟♀️ Crypto Broker Voyager Issues Notice of Default to Three Arrows
We wrote about Three Arrows Capital the other day. 3AC is a cryptocurrency hedge fund who did bet on a lot of cryptocurrency tokens/projects (including Luna) by using loaned money from different institutions.
Voyager on the other hand is a Crypto broker that offered services for institutional investors like 3AC as well. When a big client of your is on trouble, then chances are high you might be impacted by that. That is what happened to Voyager. Besides other liquidity issues, they came out with an announcement saying that they had issued a notice of default to 3AC about their loan.
We are talking about 15,250 BTC and $350 million USDC loan. Of course, they said they will pursue recovery as much as they can but chances of that happening are slim to none.
Voyager decreased the limit of withdrawals on their platform like we explained it in one of our tweets. They are financially stressed.
Sam Bankman, being the Sam he is, came with a rescue plan (btw, he might be the biggest winner in all this crypto crash that has happened recently). His venture, Almeda Ventures, provided Voyager with US$200 million cash and USDC revolver and a 15,000 BTC revolver.
As per Voyager’s announcement, they still have some liquidity of their own, US$137 million cash and owned crypto assets on hand. On top of that, the revolver line from Almeda Ventures.
Let’s see how it plays out.
🦜 Other news in the space
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