The massive increase in the number of transactions in the wake of the small stock rally of the past few days leads to Robinhood and others significantly increasing costs. The clearing houses that Robinhood works with therefore demand a significant increase in deposits in order to be able to cover these costs even if the broker should fail.
Robinhood’s options: Mobilize money, restrict trade
Robinhood can respond to this in two ways. For one thing, it can limit trade, which has already been done. Robinhood currently limits the purchase of Gamestop shares to one (!) Per user. If you already have one, you cannot buy another. This has led to harsh criticism from user circles and called the US Securities and Exchange Commission into action.
Zum Others can give Robinhood 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 taken out around half a billion US dollars as a bank loan in the course of the past week.
Fast lap brings about a Billion dollars
On Thursday Robinhood had a financing round of more than one within a few hours Billion dollars completed. As the Wall Street Journal (WSJ) reports, this fast-track process is said to have started with an early morning message from a clearing house. It is said to have demanded a significant increase in deposits by Robinhood for the same day.
As the WSJ learned from corporate circles Robinhood could have lifted 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 that the price rally will continue.
Robinhood stops Bitcoin trading with booking trick
From this point of view, Robinhood’s most recent step in dealing with the purchase of crypto values is likely to increase be seen. 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 making money via the app “Instant Deposit” function and thus basically act 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.
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