Crypto bloodbath starting to find footing: Market expert
Blue Line Capital President Bill Baruch provides insight into the stock markets and cryptocurrency.
Bitcoin has been struggling this week along with equities as the Federal Reserve sets out its roadmap to raise interest rates.
The Federal Reserve on Wednesday signaled it could "soon" raise interest rates for the first time in three years, paving the way for a March liftoff as policymakers seek to keep prices under control and combat the hottest inflation in nearly four decades.
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A rate increase would mark the first since December 2018.
Heading into Friday, bitcoin wa down in eight of the past nine days, losing 1.71% over the last three days.
Bitcoin is down more than 21% month-to-date.
Shares of Robinhood Markets fell 15% in the after-hours session after the posting a $423 million net loss in the latest quarter along with slowing growth.
The company's revenue rose $362.7 million or 14% in the fourth quarter. That's half its growth rate in the summer months, according to the Associated Press.
ROBINHOOD CFO DOESN’T PLAN TO PUT ‘MEANINGFUL AMOUNT’ OF CASH INTO CRYPTO ASSETS
The company also warned about revenue in the current quarter. The forecast was weaker than Wall Street was expecting.
Transaction-based revenue from cryptocurrencies jumped 304% to $48 million in the fourth quarter, while revenue from equity trading declined 35% to $52 million, according to Reuters
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Robinhood’s business does best when people use its app to trade often, because it makes money by routing their orders to market makers and big trading firms.
That wasn’t a problem in the first quarter of 2021, when hordes of smaller-pocketed investors banded together to drive shares of GameStop, AMC and other "meme stocks" to dizzying levels.
Nor was it an issue in the second quarter of 2021, when record-breaking jumps for dogecoin and other cryptocurrencies drove another surge of trading.
The question is whether traders will trade as much on their phones now. Conditions may get only tougher for markets as the Federal Reserve looks set to raise interest rates sharply in an effort to tame inflation.
|HOOD||ROBINHOOD MARKETS INC.||11.61||-0.80||-6.45%|
Since the start of 2022, Robinhood has seen customers making fewer trades and in smaller amounts, Chief Financial Officer Jason Warnick said in a conference call following the release of the results. But in the last few days, he said, Robinhood has seen higher levels of trading and engagement.
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Robinhood’s stock has been steadily falling since touching $85 shortly after its initial public offering last summer. It's down 34.6% already in 2022.
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