When information broke that cryptocurrency billionaire Sam Bankman-Fried was wanting into shopping for Robinhood, shares of the crypto and inventory brokerage did one thing they haven’t carried out very a lot up to now yr: They jumped. Loads.
HOOD shares jumped a lot and so quick — 12%, according to Bloomberg — that buying and selling was briefly halted.
What’s exceptional isn’t that Robinhood’s shares jumped as excessive as they did. For one factor, they’ve been tumbling for a very long time, having topped out above $70 final August.
For one more, the potential purchaser was FTX cryptocurrency change CEO Bankman-Fried, one of many richest individuals in crypto and as of late a very powerful.
Between backstopping teetering crypto companies BlockFi and Voyager Digital with strains of credit score totaling $750 million final week, naming the NBA’s Miami Warmth enviornment after FTX, and promising $100 million in political donations for the 2024 presidential race — an quantity so massive it was eye-opening even in Washington — Bankman-Fried is quickly making himself and his explosion of hair the face of crypto.
Additionally learn: Crypto Industry Lobby Punching Above Its Weight Class
In a lot the identical approach the clean-domed Coinbase CEO Brian Armstrong has been since taking the corporate public in April 2021.
However whereas Armstrong grew to become broadly recognized after itemizing his now overextended and retrenching crypto change on Nasdaq, Bankman-Fried is doing it by appearing as crypto’s reply to J. Pierpont Morgan — who backstopped banks throughout the financial institution panic of 1907 — as crypto winter units weaker companies trembling.
Bankman-Fried already owns 7.6% of Robinhood, and with Bloomberg reporting that its market capitalization dropped beneath its cash-on-hand as of June 15, it’s laborious to not see the agency as a possible cut price.
On the one hand, its lively person numbers are down 39% year-over-year in Could, and its model broken when it received caught up within the WallStreetBets GameStop fiasco, when it was accused by everybody from reporters to members of Congress of favoring an enormous hedge fund shopper on the expense of retail patrons.
Then again, it nonetheless has 15.9 million lively customers, which might be an enormous increase for FTX, which solely lately started outpacing Coinbase on every day buying and selling quantity. And it’s already blended crypto and inventory buying and selling, one thing FTX goals to do.
The agency launched FTX Shares in beta final month
“The U.S. has the most important retail base on the earth and also you don’t need to have to separate into two completely different apps to commerce two completely different asset courses,” FTX President Brett Harrison stated on the time. “This isn’t a revenue-generating mannequin for us, it’s extra of a user-acquisition technique.”
See additionally: Sam Bankman-Fried’s FTX Aims to Become the ‘Everything App’
“We want to turn out to be the ‘every part change’ and the ‘every part app’ in the case of monetary providers and FinTech basically,” Harrison added.
As for Robinhood, it’s value noting that co-founders Vlad Tenev, the president and CEO, and Baiju Bhatt, the chief artistic officer, management greater than half of the agency’s voting energy.
“We’re enthusiastic about Robinhood’s enterprise prospects and potential methods we may associate with them,” Bankman-Fried told Bloomberg round 4 p.m. “That being stated, there aren’t any lively M&A conversations with Robinhood.”
Saving and Enriching
Bankman-Fried has positioned himself as a possible savior of crypto companies, saying, “We’ve a duty to significantly contemplate stepping in, even whether it is at a loss to ourselves. Even when we weren’t those who triggered it, or weren’t concerned in it. I feel that’s what’s wholesome for the ecosystem, and I need to do what I may help it develop and thrive.”
That stated, he isn’t precisely being altruistic. Over the weekend, BlockFi traders revealed that the phrases of the road of credit score FTX gave them would let it purchase the corporate “at primarily zero value,” one investor stated.
And Bankman-Fried is now the most important single shareholder of Voyager Digital, proudly owning greater than 11% of the corporate. He additionally owned 8.4% of Bitwise Crypto Index Fund firstly of the yr.
Again in 2020, the agency acquired Blockfolio, a crypto portfolio monitoring app, to assist develop its person base, and late final yr acquired future change LedgerX, giving it licenses from U.S. regulators. And in April, FTX.US made a “sizable” funding in regulated equities change IEX, CoinDesk said.
“We’re doing that globally, in locations like in Japan, Australia, in Dubai, completely different locations the place we’ve been capable of both associate with native corporations or typically do acquisitions to have the ability to get licenses that we’d like,” Harrison stated.
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