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Elon Musk Uncovers Facts Behind Robinhood Restricting Trades on Hot Stocks Like Gamestop – Featured Bitcoin News

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Kevin Helms

Spacex and Tesla CEO Elon Musk has been trying to get to the bottom of what happened with the popular trading app Robinhood when it stopped people from buying shares of hot stocks, like Gamestop. The shares of these stocks became popular due to the Wallstreetbets movement.

Elon Musk Says People Want the Truth From Robinhood

During an interview on The Good Time Show via the Clubhouse app Sunday night, Elon Musk grilled the CEO of trading app Robinhood, Vlad Tenev, over the company’s decision to restrict hot stocks last week, including Gamestop. On Friday, Robinhood also restricted crypto trading, citing “extraordinary market conditions.”

“What happened last week? Why can’t people buy the Gamestop shares? The people demand an answer and they want to know the details and the truth,” Musk said.

Tenev began by explaining the structure of his company. “Robinhood is actually a couple of companies,” he described. Robinhood Financial processes trades, Robinhood Securities clears and settles the trades, and Robinhood Crypto which deals with crypto trades.

The Robinhood CEO detailed that last Wednesday, his platform experienced “unprecedented volume” as “a lot of these so-called meme stocks were going viral on social media and people were joining Robinhood” to buy these stocks. Consequently, the company “received a file” from the National Securities Clearing Corporation (NSCC) Thursday morning at about 3:30 AM PST. It requested Robinhood to “put up money to the NSCC based on some factors,” including the volatility of certain securities. Tenev clarified that “this is the equities business so it’s based on stock trading and not options trading or anything else,” elaborating:

They gave us a file with a deposit and the request was around $3 billion dollars which is about an order of magnitude more than what it typically is.

Musk interrupted Tenev, questioning: “Why is that so high? It sounds like this is an unprecedented increase in demand for capital. What formula did they use to calculate that?”

Tenev replied: “We don’t have the full details. It’s a little bit of an opaque formula but there’s a component called the VAR of it, which is the Value at Risk, and that’s based on kind of some fairly quantitative things … and then there’s a special component which is discretionary so that kind of acts as a multiplier.” Tenev also noted that up until that point, his company “has raised a little bit around two billion dollars in total venture capital,” so the request was “a big number.”

The Tesla CEO interrupted again, asking: “What everyone wants to know is did something maybe shady go down here? It seems weird that you’d get a sudden $10 billion demand in the morning … suddenly out of nowhere.” Tenev swiftly corrected Musk that the number was $3 billion. The Robinhood CEO then emphasized:

I wouldn’t impugn shadiness to it or anything like that, and actually the NSCC was reasonable subsequent to this. They worked with us to actually lower it. It was unprecedented activity.

Musk abruptly asked Tenev: “Is there anyone holding you hostage right now?” Tenev chuckled and replied: “No, no, I’m okay. Thanks for asking.” Both laughed.

The Robinhood CEO proceeded to explain what happened, calling the experience “nerve-wrecking.” He said after receiving the request for $3 billion, his chief operating officer called up someone higher up at the NSCC to discuss what to do. “There was another call and they lowered it to something like $1.4 billion from $3 billion,” Tenev reiterated that it was still a high number. His company then proposed a plan to the NSCC of “marking these volatile stocks that were kind of driving the activity position-closing only.”

Then, at about 5 to 5:30 AM PST, before the market opened, the NSCC came back and reduced the deposit requirement to $700 million, “which we then deposited and paid promptly,” Tenev emphasized. Acknowledging that the move was bad for customers, the Robinhood CEO said, “We had no choice, in this case. We had to conform to our regulatory capital requirements and so the team did what they could to make sure we were available for customers.”

The Spacex CEO further questioned: “Who controls this organization, this clearinghouse?” Tenev replied: “It’s a consortium. It’s not quite a government agency. I don’t really know the details of all of that.” Nonetheless, he emphasized that “To be fair … I think there was legitimate sort of turmoil in the markets … so there probably is some amount of extra risk in the system that warrants higher requirements so it’s not entirely unreasonable.” He noted that lots of other brokers were in the same situation and had to restrict the same activity.

“So it sounds like this organization calls you up and they basically have a gun to your head: either hand over this money or else,” the Spacex CEO summarized, elaborating:

Basically, what people are wondering is did you sell your clients down the river or did you have no choice. If you had no choice, that’s understandable but then we got to find out why you had no choice and who are these people that are saying you have no choice.

“I think that’s fair. We have to comply with these requirements. Financial institutions have requirements,” Tenev responded. Nonetheless, he suggested that it would be helpful to know the formula the NSCC uses to calculate these requirements so companies can plan better.

Musk proceeded to ask about whether there was outside pressure forcing Robinhood to take the action it did. Tenev affirmed that there is “a rumor that Citadel or other market makers kind of pressured us into doing this.” However, he clarified, “that’s just false,” emphasizing that “this was a clearinghouse decision and it was just based on the capital requirements so from our perspective Citadel and other market makers weren’t involved in that.”

During the same Clubhouse interview, Elon also revealed that he is a supporter of bitcoin and should have bought the cryptocurrency eight years ago. He believes that bitcoin is on the verge of getting broad acceptance by traditional finance people. On Monday, Robinhood raised another $2.4 billion from shareholders after it secured $1 billion last Thursday.

What do you think about the Robinhood CEO’s explanation? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





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Argentinean Startup Accelerator Launches Crypto Mining Farm in Mar Del Plata – Mining Bitcoin News

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Felipe Erazo

The Technological District of Mar del Plata, Argentina, will host a massive crypto mining operation backed by a domestic startup accelerator. Lothal Mining is the company that will run the operations of the mining firm in the Argentinean city.

Firm Will Mine Ethereum During the First Stage

Per local newspaper La Capital, Grupo Neutrón invested almost 45 million pesos ($310,000), and there are plans to allocate additional funding of 200 million pesos ($2.21 million).

The infrastructure is ready, and in a first stance, the firm will mine ethereum (ETH). However, the company plans to expand to other cryptocurrencies.

The funding provided by the startup accelerator seeks to acquire hardware, refrigeration equipment, building the mining farm, hiring staff to perform electrical maintenance, among other activities.

Also, officials of the Ministry of Industry of the Nation were in the mining farm to check the project’s launching. Maximiliano Gonzáles Kunz, Grupo Neutrón’s CEO, pointed out that crypto mining is urgently needed in the context that fiat is “tending to lose ground progressively.”

He added:

With this equipment, for example, we can make our processing power available to companies that enter the world of cryptocurrencies and need to transact those operations.

Growing Interest in the Crypto Mining Project, Claims CEO

On the decision of picking Mar del Plata as a hub for the mining rig, Gonzáles Kunz praised its strategic location for the technological ecosystem of the city.

Moreover, he believes the synergy created among the startups within the area is the proper environment to set up a project like this one.

Still, the startup accelerator claimed that there is “a lot of interest” in the crypto mining project. On the energy supply costs, Grupo Neutrón’s CEO commented:

We will make investments in infrastructure to guarantee a stable and cheaper supply. (…) We have strategic alliances with Grupo Núcleo and Neutrón. This gives us access to hardware availability at the best market costs, capital investments for the project, and a technological ecosystem that allows us to achieve synergy with different projects in the sector.

What do you think about this new mining rig in Argentina? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





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Goldman Sachs Sees Huge Institutional Demand for Bitcoin — 76% of Clients Say BTC Price Could Reach $100K This Year – Bitcoin News

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Kevin Helms

Global investment bank Goldman Sachs is seeing huge institutional demand for bitcoin with no signs of abating. A survey of Goldman’s institutional clients shows that 61% expect to increase their cryptocurrency holdings. Meanwhile, 76% say the price of bitcoin could reach $100,000 this year.

Goldman Sachs Sees No Signs of Institutional Demand for Bitcoin Abating

In a podcast published Friday, Mathew McDermott, head of Digital Assets for Goldman Sachs’ Global Markets Division, discusses the cryptocurrency trading environment for institutional investors.

He explained that his team conducted a cryptocurrency survey across the firm’s institutional client base, from “hedge funds, to asset managers, to macro funds, to banks, to corporate treasurers, insurance, and pension funds.” He clarified that “all of our institutional client discussion is really focused around bitcoin.”

His team received responses from 280 institutional clients and published the results of the survey this week. “What’s been particularly interesting,” according to McDermott, was that “40% of the clients currently have exposure to cryptocurrencies,” which he explained could be in any forms, from “physical through derivatives, through securities products, or other offerings in the market.” The executive revealed:

In terms of institutional demand, we have seen no signs of that abating … We see a huge amount of demand institutionally, [and] we’re also seeing that reflected in the private wealth management space as well.

He further described that “corporate treasurers, for example, they’re interested in two different aspects.” The first is whether they should be “investing in bitcoin on their balance sheet,” McDermott detailed, citing that “the key drivers from their perspective are negative rates … [and] just the general fears around asset devaluation.”

In addition, he said that they are also thinking “should we consider it as a payment mechanism? … particularly in the context of Tesla’s announcement.” Elon Musk’s electric car company, Telsa, said that it invested $1.5 billion in bitcoin in January and will soon be accepting the cryptocurrency as a means of payments for its products.

Out of the institutional clients that have crypto exposure, the survey shows that 41% own physical or spot crypto. McDermott emphasized:

61% of the clients expect their digital asset holdings to increase over the next year.

As for what’s stopping institutions from investing in cryptocurrencies, 34% of respondents believe that “regulation, internal investment, mandate permissions” are the greatest hurdles to start allocating to crypto assets. 24% believe that a lack of well-regulated, investable crypto assets is the greatest hurdle.

Goldman Sachs Sees Huge Institutional Demand for Bitcoin — 76% of Clients Say BTC Price Could Reach $100K This Year

Most Goldman’s Institutional Clients Expect Bitcoin Price Could Reach $100K This Year

As for the future outlook of cryptocurrencies, 54% of respondents predict the price of BTC will be between $40,000 and $100,000 in 12 months while 22% predict it will be more than $100,000. This price level is not far-fetched as several fund managers are predicting the same, including Skybridge Capital and Mike Novogratz.

“In terms of the price action, I think it’s very difficult to predict bitcoin. It’s not an easy pastime,” McDermott opined, elaborating:

The survey was quite insightful in the sense that 76% agreed that the price by the end of the year would be between $40,000 and $100,000 … But, 22% were predicting over $100,000.

“I was on a similar survey with a private roundtable recently and the results there echoed something quite similar where 33% were predicting over $80,000 by the end of the year,” the Goldman executive further shared.

The global investment bank recently restarted its bitcoin trading desk. McDermott confirmed that the desk will begin handling bitcoin futures and non-deliverable forwards for clients. Goldman’s global head of commodities research, Jeff Currie, recently said that the bitcoin market “is beginning to become more mature,” calling the cryptocurrency “a retail inflation hedge.”

What do you think about Goldman Sachs’ view on bitcoin? Let us know in the comments section below.

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Bitcoin Price, bitcoin price 2021, BTC Price, Goldman Sachs, goldman sachs bitcoin, goldman sachs crypto, goldman sachs cryptocurrency, institutional demand, institutional investors, price estimate, price prediction

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





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22% of Investors Say Their Institutions Likely to Trade or Invest in Cryptocurrencies – Finance Bitcoin News

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Terence Zimwara

A recent JP Morgan poll found that 22% of the respondents said their respective organizations were likely to trade or to invest in cryptocurrencies. This figure (22%) is double the percentage of respondents (11%) who said yes when asked if their respective organizations were already trading or were invested in cryptocurrencies.

The Institutional Embrace of Cryptos

According to a report, the findings of this latest poll represent fresh evidence that backs the claim that more mainstream institutions are embracing crypto assets. Already, since the start of the year 2021, major corporations like Tesla have revealed their cryptocurrency holdings. Similarly, large hedge funds like Blackrock have signaled their intention to get exposure to crypto-assets like bitcoin (BTC).

Still, as the same report shows, an overwhelming majority (78%) of investors whose institutions are yet to embrace cryptos; said there were no plans to invest or to trade in cryptocurrencies. Additionally, nearly all the respondents (98%) “believe fraud in the crypto world is ‘somewhat’ or ‘very much prevalent.’”

Cryptos Are Here to Stay

Yet, despite this perception or reluctance to invest in cryptocurrencies, some 58% of the respondents still believe that this new asset class is “here to stay.” On the other hand, some 7% of the investors assert that cryptocurrencies “will become one of the most important assets.”

Since the start of Q4 of 2020, when Square Inc., announced its BTC holdings more listed companies have revealed the values of their cryptocurrency holdings. This fact is also supported by the latest data from bitcointreasuries.org, a website that tracks public and private companies that hold BTC. According to the site’s data, more than 1.36 million bitcoins, or 6.49% of the crypto asset’s circulating supply is currently in the hands of large companies and hedge funds.

Still, despite this apparent embrace of digital assets by mainstream organizations, some 21% of the polled investors still see cryptocurrencies as just a “temporary fad.” Additionally, about 14% of the respondents are in agreement with the characterization of crypto assets as “rat position squared.”

Do you agree with the view that crypto assets will become one of the most important assets? Tell us what you think in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





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