Robinhood Reports Strong Crypto Revenues, SAB 121 Reversal Sees Bipartisan Support
Market Update
- U.S. equity indices are showing modest gains today following weekly jobless claims coming in higher than expected, showing 231k versus 212k estimated, putting downward pressure on the DXY 0.00% (-0.21%) and rates. The SPY 0.14% has gained 0.36%, approaching the $520 mark, while the QQQ -0.07% has risen 0.14% to the $440. Crypto assets are showing larger gains, with BTC 0.17% (+1.57%) rising above $62k and ETH 0.52% (+1.05%) surpassing $3,000. The Render Network’s mobile app, OctaneX, was featured in Apple’s keynote presentation earlier this week, alerting users to the ability to leverage Render’s distributed GPU network. Following the press, RNDR -2.23% has been one of the top performers this week, gaining 13.80% thus far. Marathon Digital (MARA -0.66% ) reports earnings after the market closes today and should provide some insight into how miners are navigating post-halving dynamics.
- Retail trading platform Robinhood (HOOD) reported first quarter earnings yesterday. Robinhood beat on the top and bottom lines, with $618 million in revenue ($552.7m est.) and a staggering $0.18 EPS versus consensus estimates of $0.06. The beats were helped by a 232% increase in crypto-related revenues, rising to $126 million and comprising over a third of all transaction-based revenue. The revenues were bolstered by increased crypto trading volumes surpassing $36 billion, a 224% increase compared to a year ago. Robinhood also reported $26.2 billion in custodied crypto assets as of March 31st, a 78% increase from the fourth quarter of 2023. The impressive earnings come on the heels of receiving a Wells Notice from the SEC for securities violations. Robinhood CEO Vlad Tenev went on CNBC last night and revealed that Robinhood had met with the SEC 16 times in an effort to receive regulatory guidance and, unfortunately, was met with an unresponsive demeanor from the agency. HOOD (-3.72%) shares were up 7% in pre-market trading but have since turned negative, trading at $17.18.
- The U.S. House of Representatives voted yesterday to approve a resolution bill that overturns the SEC’s Staff Accounting Bulletin (SAB) 121 proposal. SAB 121 contains controversial accounting guidance that would cripple digital asset custodial services for U.S. banks. The guidance would require banks to recognize custodied crypto assets on their balance sheets, a rule that is not required of other assets like securities. Banks would need to hold matching dollars for all custodied crypto assets, introducing additional capital requirements. The SEC bypassed all banking regulators with its proposal and would essentially limit banks from handling crypto customers. The resolution saw bipartisan support, receiving 21 Democratic votes and 207 Republican votes to pass in the House. The resolution will move to the Senate before potentially moving to President Biden’s desk. Biden has already stated that he would veto the resolution, citing that he opposes interrupting the SEC’s work on this issue.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Bitcoin's downward slide in recent weeks has been following the cycle composite which calls for a bottom on/near 5/17-19 before a sharp rally back into early August. While many were perplexed at why Cryptocurrencies failed to follow suit in the recent rally in many risk assets over the last week, historical halvings typically produced between 4-11 weeks of consolidation post-halving before pushing back to new highs. I expect that the back half of May into June should prove more conducive to rallies, and BTC 0.17% recent slide appears like an attractive risk/reward to buy dips. Despite five of the last six weeks being lower for BTC, price has barely shown much true downside volatility and BTC remains above its 38.2% Fibonacci retracement drawn from last Fall's lows. Key levels on the upside lie near $65,513k and any gain above that level should push straight up to test and exceed $73k. Overall, I view the recent consolidation as short-term only and not damaging to the broader trend. However, there could be an additional week of pullback for BTC before this bottoms and starts to turn higher. Key initial support lies at $56.5k, but if breached, one could expect a brief decline to $52k which would represent a very attractive risk/reward opportunity. In the bigger scheme of things, patience is required until BTC can stabilize which might take another week before rallies get back underway.
Daily Important Metrics
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All metrics as of May 9, 2024 1:47 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $1.22T | $62,064 | ↓ -0.86% | ↑ 47% | |
 ETH | $361B | $3,009 | ↑ 0.02% | ↑ 32% | ↓ -15% |
 SOL | $66B | $147 | ↑ 0.65% | ↑ 45% | ↓ -2.30% |
 DOGE | $496,405 | $0.0005 | ↓ -20% | ↓ -99% | ↓ -146% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| BITW | ↓ -32% | $29.60 | ↑ 2.22% | ↑ 27% | ↓ -20% |
| ETHE | ↓ -24% | $21.52 | ↑ 0.56% | ↑ 11% | ↓ -36% |
News
QUICK BITS
The Block Ledn sees growth in centralized lending, processes $690 million in crypto loans in Q1 Ledn's crypto loan growth was spurred on by demand from former Celsuis clients and the launch of U.S. spot bitcoin ETFs, the firm said. |
MARKET DATA
CoinDesk Robinhood Delivers Big Earnings Beat Driven by Booming Crypto Trading: Analysts The positive momentum seen in the first quarter has continued, with the platform taking in a record $5 billion in deposits in April, the analysts said. |
REGULATION
CryptoSlate Taiwan revises money laundering act to include digital assets Taiwan is bolstering its anti-money laundering regulations through amendments to its Money Laundering Control Act, as the island aligns its laws with internatio... |
FUNDRAISING AND M&A
The Block Arcium raises $5.5 million in strategic round to develop ‘confidential computing’ network On-chain confidential computing project Arcium completed a $5.5 million strategic funding round led by Greenfield Capital. |
MINING
Bitcoin.com Core Scientific Posts $210.7M Profit in Q1 2024, Boosted by Bitcoin Mining Surge Core Scientific announced a significant recovery in its financial performance for the first quarter of 2024, reporting a net income of $210.7 million, a stark c... |
The Block Bitcoin mining difficulty drops 6% in largest fall since bear market lows Bitcoin mining difficulty has dropped 5.7% to 83.1 trillion as the network’s hash rate falls below 600 EH/s following the halving. |
PRODUCT UPDATES AND PARTNERSHIPS
The Block Optimism’s Superchain now supports Layer 3 chains via OP Stack Optimism announced that Layer 3 chains can now join the Superchain by building on the OP Stack and sharing revenue with Optimism Collective. |
The Block SBI Holdings and Chiliz to set up joint venture in Japan for sports fan tokens The joint venture seeks to provide token-based experience and rewards for Japanese fans, including game-day activations and voting rights. |
CryptoPotato Banxa Adds Tokenized Real Estate Platform Blocksquare’s BST Token to Fiat Checkout [PRESS RELEASE – Ljubljana, Slovenia, May 9th, 2024] Blocksquare, a tokenization infrastructure provider for real estate, is delighted to announce that its nati... |
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