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    After FTX Founder Sam Bankman-Fried purchased a 7.6% stake in Robinhood, the stock rose 20%.

    One of the most prominent names in cryptocurrencies is placing a wager on individual investors. Sam Bankman-Fried, chief executive officer of cryptocurrency exchange FTX, has acquired a 7.6 percent investment in stock and cryptocurrency trading app Robinhood, according to a filing with the U.S. Securities and Exchange Commission today.

    The billionaire spent approximately $648 million for the stock, making him the third-largest shareholder in the trading app. At one point during after-hours trading, the shares of the investment company rose 37 percent. The decline was roughly 25 percent.

    Thursday’s normal trading session marked the stock’s all-time low. Robinhood’s closing price was $8.57, or 76% lower than its IPO price in July.

    The document indicates that Bankman-Fried made the investment through Emergent Fidelity Technologies. Emergent’s sole director and principal owner is Bankman-Fried.

    A 36% spike in Robinhood stock price occurred during extended trading before the shares started to fall. They had risen by nearly a quarter since their lowest point. (YouTube grab)

    Robinhood An ‘Attractive Investment’

    According to the document, the transaction occurred because Robinhood shares represented an “attractive investment.” The statement said that the intention is to hold the shares as an investment and not take any effort to change or influence ownership of Robinhood.

    The investment comes at a time when Robinhood’s fortunes and revenues have been declining; just hours before the announcement of Bankman-investment, Fried’s Robinhood shares reached an all-time low of $7.71.

    When retail investors flocked to the stock market last year, Robinhood added millions of new members. However, it has struggled to retain them; the number of monthly active users dropped by 10 percent to 15.9 million in March from 17.7 million in the same month of 2021.

    Late last month, Robinhood laid off approximately 10 percent of its workforce.

    BTC total market cap at $576 billion on the daily chart | Source: TradingView.com

    FTX Vs. Coinbase And Binance

    FTX is one of the major cryptocurrency exchanges in the world and offers derivatives products as well as spot trading for more advanced traders. The exchange has become a competitor to Binance and Coinbase, however it does not operate in the United States.

    In April, Robinhood reported that 2 million individuals on a waiting list for a crypto wallet were able to send and receive coins that were available on the crypto exchange. It stated that the wallets are not yet available in New York, Nevada, or Hawaii.

    Robinhood has steadily increased its cryptocurrency offerings. It added Solana, Shih Tzu, Polygon, and Compound to the platform last month.

    The recent decline in cryptocurrencies is a result of investors’ unwillingness to keep risky assets at a time when the Federal Reserve is taking aggressive steps to combat inflation.

    A drop in the price of a crucial dollar-pegged stablecoin also shook the market. On Thursday, Bitcoin plummeted to its lowest level since December 2020.

    Featured image from CNBC, chart from TradingView.com

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