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> “ lots of first time investors (18-24), who over time will grow to be big investors” Or will be burned by the next prolonged downturn and exit the market permanently.
Yeah. Hard to make predictions, but this sort of breathless enthusiasm seems worrisome.
Hard to know exactly where we are right now, but certainly feels closer to the latter.
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> “ lots of first time investors (18-24), who over time will grow to be big investors” Or will be burned by the next prolonged downturn and exit the market permanently.
"There is a famous story, we don’t know if it’s true, about how in the late summer of 1929, a shoe-shine boy gave Joe Kennedy stock tips, and Kennedy, being a wise old investor, thought, “If shoe shine boys are giving stock tips, then it’s time to get out of the market." Seems like I'm getting a lot of advice about the market from people with less knowledge about the market than shoe shine boys. My mom and my sister…
Turns out the whole dealership, or at least most of the employees, traded crypto as a hobby. I asked a few questions, mainly about Proof of Work, and the salesman had no idea what that was. He was completely ignorant of how crypto worked.
The most common feature of assets bubbles is that they draw in people who would normally never engage in risky financial speculation. People early to the party get rich and that draws in everyone else. Its hard to stay out of the market when your neighbor has short-term gains larger than your salary.
In the tulip bubble, everyone was a botanist. In the tech bubble, everyone was an equity trader. In the housing bubble, everyone was flipping houses or getting their real estate license. Now everyone is a crypto trader. Regardless of how useful crypto will be in the future, there is only one way this party ends. Pumping trillions of dollars into the economy can delay the pain, but the pain seems inevitable at this point.
I understand that many give Robinhood crap because it is not "sophisticated enough" or because of the Gamestop fiasco. Although many startups like to claim that they are "democratizing [x]", I honestly believe they did it. I have many friends that never traded before, and after they got their Robinhood account they feel comfortable enough to do it often. Even myself, who used to only trade a couple of times a year, s…
If I went for this positive spin, I'd talk about democratising investing, not democratising trading. Democratising trading is not inherently good, similar to democratising gambling.
I get the desire to stop commercial banks from gambling YOUR savings. But why shouldn't you be able to gamble your own savings if you want to?
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Anecdotal: My two under-18 cousins both described using their parent's credentials to buy Dogecoin on Robinhood. Great stuff driving Robinhood revenue right here.
Think of these meme stocks as baseball cards or pokemon for gen-z and everything starts to make sense.
In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC (Securities and Exchange _Commission_), the highest role of the SEC, appointed by the US President.
He was hired by Robinhood in May 2020, and his previous job was at WilmerHale, a firm specializing in defending other firms against the SEC.
This guy must be worth his weight in gold in avoiding regulatory fines for Robinhood.
“ A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected. For the three months ended March…
Dogecoin, created as a joke, is now in an S-1 as a material item.
https://www.sec.gov/edgar/search/#/q=dogecoin&dateRange=all&...
I remember seeing their first public demo at LA Hacks in 2014. Seemed like a couple of kids right out of college. They had the iPhone's screen hooked up to the projector and one of their friends kept sending them silly text messages the whole time that they had to dismiss. This was before the Do Not Disturb feature came out. I remember wondering how it took so long for someone to make a half decent stock trading app…
I know better, and I still use Robinhood. I also use Fidelity, but their mobile and web apps suck beyond description, and used to use Scottrade, who also suck. Robinhood doesn't just look better (although that's important); it's easier to use and faster; bank transfers are WAY easier; you don't have to jump through hoops to enable options trading (which means a lot of people who shouldn't trade options now do, but it…
That's what happens when you spend a decade printing a lot of money Value becomes diluted
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Anecdotal: My two under-18 cousins both described using their parent's credentials to buy Dogecoin on Robinhood. Great stuff driving Robinhood revenue right here.
Think of these meme stocks as baseball cards or pokemon for gen-z and everything starts to make sense.
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What's most ridiculous about this level of crypto trading volume on Robinhood is that you don't even own the crypto you trade there. You can't use your own wallet, you can't transfer it to your own wallet. Robinhood holds it; you're just gambling on their holdings.
It really irks me because “owning” it in that way flies in the face of cryptocurrency’s supposed raison d’être: anonymous decentralized currency. Dogecoin held at RH is none of those things.