Robinhood raises a billion in fresh funds, hinders Bitcoin buying
No time right now?
The rapidly increasing trading volume with small stocks, especially Gamestop, keeps the operators of the trading app Robinhood in trouble. They react quickly.
The massively increasing number of transactions in the wake of the small stock rally of the past few days is leading to significantly increasing costs for Robinhood and others. The clearing houses that Robinhood works with therefore require a significant increase in deposits in order to be able to cover these costs even if the broker should fail.
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Robinhood’s Options: Mobilize Money, Restrict Trade
Can Robinhood respond in two ways. For one thing, it can limit trade, which has already been done. Current Robinhood limits the purchase of Gamestop shares to one (!) per user. If you already have one, you can’t buy another. This has led to harsh criticism from user circles and called the US Securities and Exchange Commission into action.
On the other hand, Robinhood can give in to the demands of the clearing houses and deposit more money to secure the system. The trading center did that too. The company is said to have already taken out around half a billion US dollars as a bank loan in the course of the past week.
Fast lap brings in over a billion dollars
On Thursday, Robinhood completed a financing round of more than one billion dollars within a few hours. As the Wall Street Journal (WSJ) reports, this fast-track procedure should have started rolling through an early morning message from a clearing house. It is said to have demanded a significant deposit increase by Robinhood for the same day.
As the WSJ has learned from corporate circles, Robinhood could have managed the volume on its own. However, the management is said to have had reservations about possibly facing further exponential growth under higher financial pressure. In this respect, the financing round should be seen under the expectation of the course rally.
Robinhood stops Bitcoin trading with booking trick
Under this aspect, too Robinhood’s latest move be seen in dealing with the purchase of crypto assets. It is still possible to buy Bitcoin via the app. However, this is only possible with cash receipts that have already been booked.
Robinhood traders have the option of depositing money using the “Instant Deposit” app function and thus trading directly. Robinhood currently does not allow that. Traders must first wait for the deposit to be valued, which according to Robinhood can take up to five business days. In any case, that takes out the momentum that had recently developed through a small but fine change by Elon Musk to his Twitter profile.
