tl;dr
The naysayers are having a go at Robinhood’s tokenised stock offering, which proves it is the right thing to do.
Market Snap
Market Wrap
That $80k level keeps getting breached to the upside and then lost again.
The latest NFP (non-farm payrolls) numbers made the rates markets skittish. It is one of the most important monthly numbers, but I remain unconvinced it is of much value in the short term, other than judging what others might think of it. Which is somewhat circular, I think you would agree. The methodology is suspect. The revisions even more so.
The growth of USD-denominated stablecoins that are regulated within the US will onshore many of the digital dollars created elsewhere. This will cause a realignment between the long and short ends of the curve to be flatter than history might suggest with both at a level lower than today.
Curious Cryptos’ Commentary – Robinhood (HOOD)
As we saw last week, Robinhood has seen explosive growth in its offering of tokenised stocks to its clients. In the first fifty-two days after launch, total volumes reached $1bn. Less than two weeks later, that had trebled to over $3bn. I see no reason why that trend should change any time soon.
AMC Entertainment’s CEO, Adam Aron, is not very happy:
https://x.com/CEOAdam/status/2095761359388520460
Aron wasn’t having a good day, especially when he claimed that his misspelling of “DECIST” was a deliberate attempt at humour (eh?). The CCC is rarely sympathetic to those who are anti-cryptos for they are the ones who want to restrict our liberties, our freedoms, and our privacy. We have even less sympathy for those who (allegedly) tell blatant porkies.
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Robinhood’s Stock Tokens do not confer on buyers the shareholder rights that accompany direct ownership of the referenced shares. The buyers are not shareholders, cannot vote at the AGM, and are not legally entitled to dividends, or any capital restructuring events. Instead, the buyers of Robinhood’s tokenised stocks gain exposure to the financial performance of those stocks (give or take) via issuance by a Jersey-based entity that uses derivatives to track the economic gains or losses of the actual stock.
But here’s the thing.
This is not new.
My very first job on a trading floor, decades ago now, was to manage the structured-note book. Investors, our clients, would buy a bond issued by my bank, which would pay out based on the performance of the underlying, be that a single stock, a commodity, an index, or whatever exposure the client desired. All of this was hedged using a complex combination of derivatives. It is big business. It is perfectly legitimate. No regulator in the world has a problem with it.
Robinhood’s tokenised stock offering is a very similar setup and achieves many of the same objectives. What is different is that it is executed and recorded on the blockchain rather than on a centralised database. The advantages of doing so are legion. Those advantages are beneficial to literally everyone, even the naysayers, though they know it not.
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One response to Aron’s rant called it right:
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By way of disclosure, the CC Treasury has been investing in HOOD since earlier this year, in expectation that the company was positioning itself to take advantage of the tokenisation of RWAs, and its strong distribution amongst retail investors, who are already the early adopters of 24/7 trading. Not advice, merely disclosure, which alerts readers to the truth that CC has financial exposure to the issues we discuss in this missive.