Robinhood Restricts Crypto Trading 'Due To Extraordinary Market Conditions' (cnbc.com) 64
Robinhood restricted trading in cryptocurrencies on Friday, as the price of bitcoin and a meme-inspired token rose sharply. From a report: Users began reporting that the trading app had halted instant deposits for crypto purchases earlier in the day, meaning they could only buy the currencies with funds already deposited in their accounts. Such deposits can take up to five business days to clear, Robinhood said. "Due to extraordinary market conditions, we've temporarily turned off Instant buying power for crypto," a Robinhood spokesperson said in a statement emailed to CNBC. "Customers can still use settled funds to buy crypto. We'll keep monitoring market conditions and communicating with our customers." Robinhood's move to restrict crypto trading comes after dogecoin, a digital coin based on the popular "doge" meme, spiked as much as 800% Friday. The cryptocurrency was initially started as a joke but has since found some traction.
Wait (Score:3)
Re:Wait (Score:5, Insightful)
It's interesting that I just wrote this for another article before reading this one:
The whole idea of investments were to pick a company you felt had good ideas and potential for growth and to collectively put money into a venture that a single person couldn't afford. The entire system is flawed with trading companies vying to have the lowest sub-microsecond communication latency. This isn't what was intended.
Capitalism is a very responsive system as social and economic policy systems go. But so are today's modern fighter jets. What they both have in common is that to achieve responsiveness, they trade flight stability. A modern fighter jet can't fly a straight line without a computer making minute control-surface adjustments. The system is inherently unstable because it is based on greed. This isn't a moral accusation, it's simply a fact. When greed and gain are involved, there is nothing some people won't do to game the rules. The problem is, the intention of the system is being subverted, often times within the current rules, and adjustments are required. Antitrust laws and SEC regulations are capitalism's equivalent of a flight computer, but they aren't sufficient today. They are generations old and they simply can't react quickly enough or finely enough to today's instabilities. I'm not sure there is a good regulation fix for this that lets us keep the way things are now. The problem is, the intended goal of the system has been being subverted for so long and it has come so gradually that it is now wide spread. There is no rule fix that will bring the game field back to being about what it was originally intended that won't have some, or even most, of the current system howling about lost profits.
I suspect Musk is right and the whole system of short-selling is dangerous and flawed. I don't think there will be a fix for this kind of instability until borrowing and lending of stocks are outright forbidden. We might also have to slow down stock trades. Introducing latency into the system, say a 24 hour waiting period between ordering a stock and the actual sale finalization, might also help with the instabilities. You might also need to put in a 30-day sell delay. You buy a stick, you are forced to hold it for 30 days before selling. We need to force the system back into a strategic investment platform, rather than a tactical one.
It was written with stock buy/sell in mind, but the instability I described, and one of the remedies which I proposed was necessary (that of adding intentional latency into the system) is just as relevant to crypto currencies.
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At this stage, the money itself is rigged and the markets are not free. When the interest rate is manipulated toward zero, your company value is inflated and your company could be non-viable. A last note: cryptocurrencies (!= Bitcoin) is a simple synonym of private database fiat money.
Re:Wait [for the stock market to be saved] (Score:4, Interesting)
Good comment (and should have been FP), though you're a bit fuzzy on the distinction between "capitalism" and the "stock market". I especially like that you have a solution approach.
However I think there is a partial flaw in a rigid time limit. I do think your idea would greatly slow down the trading, which would be a good thing. But there would still be race conditions as the time limits expire. Also, I suspect there would be dynamic instabilities created to exploit the "time trapped" traders. The biggest gamesters will still figure out ways to break the new rules of every game.
The solution approach I still favor would be to impose a small transaction fee on every stock purchase. (If it goes to the government, then it would be a transaction tax.) The basic idea would be to create friction in the engine to slow it down. These days I like to compare the stock market to a friction-free engine accelerating without limit. At some point it's going too fast and something has to break. (As you properly noted, this modern game-like situation has essentially no relationship to the original purposes of the "limited liability" stock markets.)
That's what happened in 2008, but the governments managed to borrow enough money to patch things together again. But instead of learning any lesson, they just let it start again, only bigger and faster. At some point it's going to break to the FUBAR level.
(Then again, all of this might be moot. Since reading The AI Does Not Hate You and some related books I'm now expecting the stock market to get paperclipized any day now. I think AlphaGo Zero already has the capacity to learn to "win" the stock market game as soon as it gets access to the game. What happens to the world's financial markets when one player owns all the equities (and futures and shorts) in the world?)
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The solution approach I still favor would be to impose a small transaction fee on every stock purchase. (If it goes to the government, then it would be a transaction tax.) The basic idea would be to create friction in the engine to slow it down. These days I like to compare the stock market to a friction-free engine accelerating without limit. At some point it's going too fast and something has to break. (As you properly noted, this modern game-like situation has essentially no relationship to the original purposes of the "limited liability" stock markets.)
The big problem with all notions of this sort is that these days a lot of the action happens outside of the exchanges. Adding delays and fees would push even more trading off-exchange. So you need to add additional regulation to force trading back onto the exchanges, which would, ironically, provide some of the benefit of delays or fees without actually adding delays or fees.
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Good point. But in the defense of transaction fees, at least the fees should be able to cover the costs of additional regulation.
Also worth noting that the off-exchange trading is vulnerable to the legal system, because if any money is actually changing hands, then they still need recourse to the courts to enforce the contracts. But of course it's really hard to keep habitual gamblers from gambling anywhere and whenever possible. Reminds me of Liar's Poker by Michael Lewis. (I need to check if he's done a
Re:Wait [for Robin Hood to be destroyed] (Score:2)
What a feeble FP. What, pray tell, do you think you have seen before?
What seems obvious (to the most casual observer (me)) is that Robin Hood was involved in an unforgivable crime. Rich people lost money. That is not allowed. The extreme greed of the rich people is no excuse.
On that basis I must anticipate, nay, I dare say predict, that Robin Hood will soon be put out of business. Must make an example of this criminal. How dare the peasants get so uppity?!
(Unlike the criminal whose lies sacked the Capitol a
I know this! (Score:2)
Its a UNIX system!
Someone to declare (Score:5, Insightful)
'Russian hackers' connection to those reddit forums in 3, 2, 1...
Can't let the rubes rock the Market.
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All Hail The Defenders of the Public Good!
They are the only crowd that always deals honestly on the stock market!
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Not all of them are that dumb. AOC is on the ball with this issue. Over at reddit, the r/conservative subreddit is in a tizzy because they find themselves agreeing with AOC, and it's blowing their minds. Kinda funny, really. The one thing that is definitely coming from all this is real, unified class consciousness. Everyone, left and right are realizing, it's the ultra wealthy elites versus the rest of us. And there's more of us than there are of them.
Re: Someone to declare (Score:1)
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Well, what usually happens is the elites try to fuck over the petty bourgeoisie, who then get the proles on side and we all have a little heads on pikes party.
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This is a question of inherent fairness and everyone playing be the agreed upon rules which shouldn't be changed while the game is in play just because someone had an awful strategy that's making them lose. You don't even need to make this political at all or try to describe it in terms of sides. The only people who wouldn't think thi
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The problem is exactly that the ultra wealthy do not have to play by the same rules as the rest of us. They forced Robinhood and other day trading apps to prevent people from buying these stocks. They have called in favors from Google and Apple saying "get rid of all the 1 star reviews on the Robinhood app." They have all their friends installed at the SEC, which will do nothing to protect small investors or punish the big players.
The elites never have to face the consequences of their actions, and THAT is
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He goaded that mob that was chanting for her blood, and he needs to pay for inciting violence.
Citation required.
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https://www.kvue.com/article/n... [kvue.com]
Watch it and weep for our country, our freedom, and Ted Cruz's shriveled, blackened soul.
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Yeah, but he claimed the election was stolen, and demanded action from Trump supporters. Not sure how you missed that part. I mean, he's said it over and over again. He has kept making those claims even after the courts rejected them. He made those claims while the riot was happening. Anyone who really, honestly thought the election was stolen would feel justified in taking action into their own hands. And the only reason they would believe that is because people lied to them.
I mean, we are on the same page
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LOL. The idea that everything you dislike is "subversion" and "foreign enAmy attack".
Should have listened to Elon (Score:1)
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Bitcoin is 10 cents, buy $100 of it. Nah, what a waste of money.
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Boy! I'm glad I didn't buy $10 of doge coin when it was a fraction of a penny! What an idiot I would have been!
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A. a 1%, who is part of the problem.
2. is a super villain.
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AFAIIA, there's no way to bet against Dogecoin, because you can't beat the DOGE. So this is just a vanilla pump and dump conducted via intarweb lynch mob, right? We are talking Reddit, after all, they perfected [wikipedia.org] that.
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You're damn right! One Dogecoin is worth one Dogecoin, and there's nothing anyone can do about it!!!1
Gives all crypto a bad name (Score:1)
har de har har
Lulzy AF (Score:5, Interesting)
I like the nonsense that's happening with these stocks and joke cryptocurrencies these days, it messes with the ownership class and exposes what a ridiculous farce the stock market is.
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Maybe it blows up this whole dumb economic system, destroying much of the wealth of the 1%, and something more sensible rises from its ashes?
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The most lasting change that resulted? Reaganism. (Reaganism!)
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It'll be subtle. The hedge funds and other big players are on notice that they don't necessarily have the field to themselves and that the unwashed mob now has some ability to look over their shoulders if the regulators can't or won't.
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ridiculous farce the stock market
This has been known for decades. I don't think this is a new revelation.
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ridiculous farce the stock market
This has been known for decades. I don't think this is a new revelation.
A revelation no, but it has seldom been so nakedly demonstrated, day after day.
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Well, yeah - this is kind of the first round of the big obvious thing that's possible.
Automation.
That's what programming is - that's what the tools we've been building all this time allow, and are largely INTENDED to do.
We as people have paid enormous amounts of money to make round after round of hardware to allow easier communication, serialization of data.
We use the speed and concurrency we've build up and connected to make scripting languages and protocols, and put computers in every hand and place of wo
Re:Lulzy AF (Score:4, Insightful)
it messes with the ownership class and exposes what a ridiculous farce the stock market is.
I find this quite similar to what is happening in politics right now. Many of our democratic and economic systems are built upon a social contract between the elites and the general population. The general population cedes control of most institutions to the elite because they are the ones with the education, experience, and connections to run them. The elite class then ensures the general population is not being taken advantage of and that the general population shares in a significant amount of society's progress. In modern times there is also an expectation to have a pathway for those in the general population to educate themselves and work hard enough to become a part of the elite class if they wish. (obviously all of this is an overgeneralization)
But when that social contract erodes, problems arise. Populism such as the election of Donald Trump or Brexit are clear examples, as is this recent reddit trading behavior. The elite class has taken a disproportionate amount of our society's wealth and the general population is fed up. They have begun lashing out, often in ways that damages themselves as much if not more than the elites, but they simply refuse to accept the status quo.
If the elites want to renew the social contract, they need to fix what they broke. Until that happens we will only see more wild and unruly behavior from average citizens. And since they usually don't know what they are doing, results can be very unpredictable.
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In modern times there is also an expectation to have a pathway for those in the general population to educate themselves and work hard enough to become a part of the elite class if they wish. (obviously all of this is an overgeneralization)
I think this was a red herring thrown at us. The "social ladder" historically happend due to the turmoil of war and the post-war reconstruction effort. Leaders had died or had been removed due to their connections with the enemy, there were lots of things to do and lots of open positions in the power structure; and also, people who just had thought for freedom were threatening to overthrow the old power structures, communist or anarchist-style. A solution had to be found to channel their energy while preser
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The social contract is a lie - always has been. The real terms: the 99% work, the 1% get most of the money. Riches do not trickle down, they trickle up from the 99% to the 1%.
Your mention of wealth trickling up or down is very reminiscent of the decade where the social contract really started to erode rapidly. "By 1944 the top 1%’s share was down to 11.3%, while the bottom 90% were receiving 67.5%, levels that would remain more or less constant for the next three decades. But starting in the mid- to late 1970s, the uppermost tier’s income share began rising dramatically, while that of the bottom 90% started to fall. [...] estimates for 2012 have [the top 1%] receivin
Comment removed (Score:3)
The more I hear about the world of finance (Score:3)
the more I think a lot of them should be in jail. If they all played fast and loose with their own balls, that'd be fine. But they play with ours.
All I see here is signs that another bubble is about to burst, another generation of schmucks will lose their life savings and their pensions, another administration will bail out the fat cats who fucked it all up for decent people, another round of traders will get bonuses for a job well done, and nothing will change, primed and ready for another fuck-up in 10 years time.
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Hear, hear, but it's okay because "they" can blame the Democrats now!
That was the perverse lesson they learned from 2008. Well, actually they didn't learn it. Just confirmed that it works same as it ever did.
Per my earlier comment, Robinhood is imminent and flaming toast. Robbing from the (greediest) rich people is not allowed, no matter how much they deserved it.
Why does Robinhood still have users? (Score:1)
I would hope this would inspire the search for alternatives, like what was done with WhatsApp.
Re: Why does Robinhood still have users? (Score:2)
I am not sure if their users realize other firms have apps for the phone....
Insrection Much? (Score:5, Insightful)
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Re: Insrection Much? (Score:1)
Robinhood (Score:2)
I don't think I've ever seen or heard of Robinhood so much as this week, Good or bad... people will know more about who they are now.
Lesson to the future generations (Score:1)
Future historians are going to have a lovely example of economic bubbles and, eventually, how they burst. No value is added by these activities, so sooner or later people have to lose out.
Re: Lesson to the future generations (Score:2)
Most people are conveniently ignoring the current historians. We've watched this play out many times already.
Dogecoin never stopped being a joke (Score:4, Insightful)
But obviously admitting the fact that cryptocurrency buyers have put 7 billion into a joke would reflect poorly on the market as a whole.
That would almost make it seem all crypto has been bid up quite regardless of any future practical use other than finding the greater fool.
So it "got traction" it's now also the future of currency :)
Again? (Score:3)
Pull your coin from Rob-you-blind (Score:2)
That's it. (Score:2)