Raphael Stevens

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    Robinhood launches crypto transfers in Europe as it pushes overseas expansion

    Retail investing platform Robinhood announced that it’s offering customers in Europe the ability to transfer cryptocurrencies in and out of its app.
    The company is looking to broaden its product capabilities in the region as it ramps up its international expansion.
    The company said that it’ll allow customers in the European Union to deposit and withdraw more than 20 digital currencies through its platform, including bitcoin, ethereum, solana, and USD coin.

    Dado Ruvic | Reuters

    Retail investing platform Robinhood on Tuesday announced that it’s offering customers in Europe the ability to transfer cryptocurrencies in and out of its app, broadening its product capabilities in the region as it presses ahead with international expansion.
    In a blog post on Tuesday, the company said that it’ll allow customers in the European Union to deposit and withdraw more than 20 digital currencies through its platform, including bitcoin, ethereum, solana, and USD coin.

    The move effectively gives Robinhood’s European users the ability to “self-custody” assets — meaning that, rather than entrusting your cryptocurrency to a third-party platform, you can instead take ownership of it in a fully owned wallet that holds your funds.
    In December last year, Robinhood launched its crypto trading service, Robinhood Crypto, in the EU for the first time. The service allowed users to buy and sell cryptocurrencies, but not to move them away from the platform, either to another third-party platform or to their own self-custodial wallet.
    Johann Kerbrat, general manager of Robinhood’s crypto unit, told CNBC that he thinks the EU has the potential to become an attractive market for digital currencies, thanks to crypto-friendly regulations being adopted by the bloc.
    “The EU can become a very attractive market next year,” Kerbrat said in an interview. He pointed to the EU’s landmark Markets in Crypto-Assets (MiCA), regulation, which sets out harmonized rules for the crypto sector across all 27 of the bloc’s member states.
    Once MiCA is fully in place, Kerbrat said, every EU country will fall under the same unified regime.

    “In terms of total addressable market, [the EU] is as big as the U.S.,” he told CNBC, adding, “it’s definitely an interesting market for us.”
    Robinhood added that, for a limited time, the company will offer European customers the ability to get 1% of the value of tokens deposited on its platform back in the form of the equivalent cryptocurrency they transfer into Robinhood.
    Robinhood is rolling out new features in the EU at a time when U.S. crypto firms are sparring with regulators at home. In the U.S., the Securities and Exchange Commission has sued several companies including Coinbase, Binance and Ripple over claims that they’re all dealing in unregistered securities.

    Each of the platforms has contested the SEC’s allegations, stipulating that tokens marketed and sold on their platforms don’t quality as securities that should be registered with the agency.
    “We are disappointed by the way U.S. regulation is happening, where it’s basically regulation by enforcement,” Kerbret told CNBC. “We are not super happy to see that.”
    Robinhood is regulated by the SEC and the Financial Industry Regulatory Authority (FINRA) at a federal level in the U.S. It also holds a BitLicense with New York State Department of Financial Services.

    Bitstamp deal

    In June, Robinhood announced that it would acquire Luxembourg-based crypto platform Bitstamp to take advantage of the firm’s exchange technology and further expand its reach globally. The deal, which is valued at approximately $200 million in cash, is set to close in the first half of 2025.
    Kerbrat said that the company’s deal to buy Bitstamp would help it gain access to even more international markets and obtain coveted regulatory permissions around the world. Bitstamp holds over 50 licenses and registrations globally including in Singapore, the U.K. and the EU.
    Beyond expanding globally, the deal with Bitstamp is also expected to help Robinhood diversify its crypto business to serve more institutional investors, Kerbrat told CNBC. For example, Bitstamp offers a “crypto-as-a-service” offering which helps banks and other financial firms launch their own crypto capabilities.
    Robinhood’s crypto trading, deposit and withdrawal functionality are currently only available to customers in the European Union, not in the U.K. The company launched its popular stock trading service to Brits in November last year. However, it does not yet currently offer crypto services to U.K. clients. More

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    China’s stock surge has echoes of the 2015 bubble. What’s different this time

    Over six months from 2014 to 2015, the Chinese stock market doubled in value, while leverage climbed, Aaron Costello, regional head for Asia at Cambridge Associates, pointed out Monday.
    This time around, the market hasn’t run up as much, while leverage is lower, he said. “We’re not in the danger zone yet.”
    What’s less clear is whether economic growth will pick up enough to support a sustainable market rally.

    A customer watches stock market at a stock exchange in Hangzhou, China, on September 27, 2024. 
    Costfoto | Nurphoto | Getty Images

    BEIJING — The rocket higher in Chinese stocks so far looks different from the market bubble in 2015, analysts said.
    Major mainland China stock indexes surged by more than 8% Monday, extending a winning streak on the back of stimulus hopes. Trading volume on the Shanghai and Shenzhen stock exchanges hit 2.59 trillion yuan ($368.78 billion), surpassing a high of 2.37 trillion yuan on May 28, 2015, according to Wind Information.

    Over six months from 2014 to 2015, the Chinese stock market doubled in value, while leverage climbed, Aaron Costello, regional head for Asia at Cambridge Associates, pointed out Monday.
    This time around, the market hasn’t run up as much, while leverage is lower, he said. “We’re not in the danger zone yet.”
    Stock market leverage by percentage and value were far higher in 2015 than data for Monday showed, according to Wind Information.

    The Shanghai Composite in June 2015 soared past 5,100 points, a level it has never regained since a market plunge later that summer. MSCI that year delayed adding the mainland Chinese stocks to its globally tracked emerging markets index. Also hitting sentiment was Beijing’s back-and-forth on a crackdown on trading with borrowed funds and a surprise devaluation of the Chinese yuan against the U.S. dollar.
    This year, the yuan is trading stronger against the greenback, while foreign institutional allocation to Chinese stocks has fallen to multi-year lows.

    The Shanghai Composite closed at 3,336.5 on Monday, before mainland exchanges closed for a week-long holiday commemorating the 75th anniversary of the People’s Republic of China. Trading is set to resume on Oct. 8.
    In the runup to the 2015 market rally, Chinese state media had encouraged stock market investment, while loose rules allowed people to buy stocks with borrowed funds. Beijing has long sought to build up its domestic stock market, which at roughly 30 years old is far younger than that of the U.S.

    Strong policy signals

    The latest market gains follow announcements in the last week of economic support and programs to encourage institutions to put more money into stocks. The news helped stocks rebound from roughly their lowest levels of the year. The CSI 300 rallied by nearly 16% in its best week since 2008.
    Chinese President Xi Jinping on Thursday led a high-level meeting that called for halting the real estate market’s decline as well as strengthening fiscal and monetary policy. The People’s Bank of China last week also cut interest rates and the amount existing mortgage holders need to pay.
    “The policy is much stronger and [more] concerted this time than 2015. That said, the economy faces greater headwind[s] right now compared to back then,” said Zhu Ning, author of “China’s Guaranteed Bubble.”
    One week of massive stock gains do not mean the economy is on its way to a similar recovery.
    The CSI 300 remains more than 30% below its February 2021 high, a level that had even surpassed the index’s 2015 high.
    “The Japanese experience provides an important perspective, as the Nikkei 225 Index bounced four times by an average of 34 per cent on its way to a 66 per cent cumulative drop from December 1989 to September 1998,” Stephen Roach, senior fellow at Yale Law School’s Paul Tsai China Center, pointed out Tuesday in a blog post that was also published in the Financial Times opinion section.
    Economic data for the last few months have pointed to slower growth in retail sales and manufacturing. That raised concerns that China’s gross domestic product would not reach the full-year target of around 5% without additional stimulus.
    “I think what’s missing is the key to a lot of this, that has not come out, which would be a truly confidence-boosting measure, is how are they going to fix the local government finances,” Costello said, noting local coffers once relied on land sales for revenue to spend on public services.
    While Chinese authorities have cut interest rates and eased some home buying restrictions, the Ministry of Finance has yet to announce additional debt issuance to support growth.

    Animal spirits at play

    Peter Alexander, founder and managing director of Z-Ben Advisors, expects the level of fiscal stimulus — when it’s likely announced in late October — to be less than what markets are hoping for.
    It “may have investors a little bit over their skis, as people like to say,” he said Monday on CNBC’s “Street Signs Asia.”
    He added in a written response that his experiences in 2007 and 2015 indicate the Chinese stock market rally could last for another three to six months, or abruptly end.
    “This is pure animal instincts and the Chinese have been pent up for a stock market rally,” Alexander said. He added that there are market risks from how unprepared the stock trading system was for the surge of buying.
    Data on the number of new retail investors in China this year wasn’t publicly available. Reports indicate brokerages have been overwhelmed with new requests, echoing how individuals piled into the stock market nearly a decade earlier. The Shanghai Stock Exchange on Friday said confirming transactions at the market open had been abnormally slow.

    Looking for earnings growth

    “China was cheap and was missing the catalyst. … The catalyst has occurred to unlock the value,” Costello said.
    “Fundamentally we need to see corporate earnings go up,” he said. “If that doesn’t go up, this is all a short-term pop.”
    Beijing’s efforts earlier this year to stem a market rout included changing the head of the securities regulator. Stocks climbed, only to see the rally peter out in May.
    A factor that can send stocks past May levels is that earnings per share forecasts have stabilized versus downgrades earlier this year, James Wang, head of China strategy at UBS Investment Bank Research, said in a note Monday.
    Lower U.S. interest rates, a stronger Chinese yuan, increased share buybacks and more coordinated policymaker response also support gains, he said. Wang’s latest price target of $70 on the MSCI China index is now just a few cents above where it closed Monday.
    — CNBC’s Hui Jie Lim contributed to this report. More

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    EchoStar’s Dish sale marks disappointing end to Charlie Ergen’s ‘Seinfeld’ strategy

    EchoStar agreed to sell pay-TV provider Dish Network to DirecTV Monday for $1 in equity and $9.75 billion in associated debt.
    The transaction, if approved by regulators, ends Dish’s decade-long quest to marry pay-TV and wireless service.
    It also may conclude Ergen’s so-called ‘Seinfeld’ strategy, which he first referenced in 2011.

    Dish’s Charles Ergen
    Andrew Harrer | Bloomberg | Getty Images

    Dish’s “Seinfeld” strategy appears to have ended quite like the actual show — with its finale a generally-accepted disappointment.
    In 2011, Dish cofounder Charlie Ergen first mentioned “Seinfeld” on an earnings call, responding to an analyst’s question about his company’s mixed bag of assets. Ergen noted a half-hour episode of the 1990s sitcom would usually start with multiple plot lines without a clear direction, “But it all seemed to come together in the last couple of minutes,” he said. “And so I think in terms of where we’re going strategically, you’ll have to just wait and see where it all comes together.”

    On Monday, assuming regulatory approval, the conclusion was revealed.
    EchoStar, Dish’s parent company, sold the pay-TV provider to DirecTV for a nominal price of $1 and $9.75 billion of associated debt on the business. EchoStar shares fell more than 11% Monday.
    In recent years Dish tried and failed to transition to a nationwide wireless carrier, while seeing millions of pay-TV subscribers cancel for streaming services and operators that include high-speed broadband, such as Comcast and Charter.
    Dish and DirecTV have lost a combined 63% of their video subscribers since 2016.
    “Times have changed,” said EchoStar CEO Hamid Akhavan in a CNBC interview Monday. “The content-distribution industry has been on the decline, losing customers at a rapid pace.”

    The company’s enterprise value has plummeted in turn.
    When Dish and DirecTV discussed merging in 2014, DirecTV’s market capitalization was about $40 billion, and Dish’s market valuation was more than $28 billion.
    DirecTV sold a year later to AT&T for $49 billion in equity value. Dish remained independent and lost almost all of its value as its business dwindled and satellite TV has become increasingly anachronistic.
    EchoStar and Dish merged back together earlier this year after separating in 2008. EchoStar was motivated to move Dish and its debt off its balance as a $2 billion debt payment matures in November, CNBC reported last week.

    Wireless gambit

    When Ergen used to talk about Dish and its future trajectory, he’d sometimes hold out his hand and stretch out his fingers, using them as metaphors for different pathways forward. For years, he tried to marry Dish’s pay-TV business with a wireless service, buying up spectrum at auctions and petitioning regulators to allow its usage.
    Dish ended up acquiring Boost Mobile as a divestiture from T-Mobile for $1.4 billion in 2019. Still, without a partner, it’s been difficult for Dish to find the capital to both run its pay-TV business and build out a nationwide network to compete with AT&T, Verizon and T-Mobile — especially as satellite TV cash slow diminishes each year with the loss of millions of subscribers.
    “We couldn’t feed [the wireless] business properly,” Akhavan said Monday. “The focus of the company being in multiple directions was also a management distraction.”
    The actual series finale of “Seinfeld” was widely panned compared to the show’s best episodes. It’s hard not to view this pathway for Dish as a similar disappointment.
    WATCH: EchoStar CEO exclusive CNBC interview on Dish-DirecTV tie-up More

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    EchoStar to sell Dish to DirecTV, combining major pay-TV providers

    EchoStar is selling its Dish TV provider and digital business Sling to rival provider DirecTV in a deal announced Monday.
    DirecTV agreed to pay a nominal fee of $1 for Dish, while assuming the company’s net debt.
    The deal is expected to close in the fourth quarter of 2025.
    Combined, DirecTV and Dish will serve close to 20 million customers.

    Hamid Akhavan, EchoStar CEO, speaking on CNBC’s “Squawk on the Street” on Sept. 30, 2024.

    EchoStar is selling its Dish TV provider and digital business Sling to rival DirecTV in a deal announced Monday that brings together two of the largest pay-TV providers. EchoStar shares fell more than 11% Monday.
    DirecTV agreed to pay a nominal fee of $1 for Dish. The deal will see DirecTV assume about $9.75 billion in debt and is contingent on consent from some of Dish’s bondholders, according to a news release.

    The deal is expected to close in the fourth quarter of 2025. Combined, DirecTV and Dish will serve close to 20 million customers, according to Reuters.
    “This was the right time to bring the companies together so we could create a company that ultimately had enough ability to negotiate better deals with the programmers and bring smaller packages to the market, more bite-sized packages, which the consumers are asking for,” EchoStar CEO Hamid Akhavan told CNBC’s “Squawk on the Street” on Monday.
    “I think this was a scale game that kind of puts us in a level playing field with the competitors in the market,” he said.
    The content distribution industry as a whole has been on a major decline, Akhavan said, and distribution companies such as Dish and DirecTV have fallen behind other platforms with newer technologies and wider reach.
    He also said EchoStar was not able to fully support both its video distribution and core wireless internet businesses, and that this merger will allow the company to put all of its resources toward its core services.

    Also on Monday, AT&T announced it would sell its entire 70% stake in DirecTV to private equity firm TPG for $7.9 billion. The company sold 30% of its stake to TPG in 2021, then valued at $16.2 billion. AT&T originally bought DirecTV in 2014 for $48.5 billion.
    The possibility of a merger between Dish and DirecTV has been rumored for decades. The companies were close to a deal in 2002 in which EchoStar would have acquired DirecTV from General Motors’ Hughes Electronics, before the Federal Communications Commission shut it down. At the time, EchoStar beat out Rupert Murdoch’s News Corporation in a bidding war for DirecTV.
    Since then, the satellite TV industry has taken several major hits as consumers moved to streaming services. With a roughly $2 billion debt payment looming and just $521 million in cash and cash equivalents as of June 30, according to public filings, EchoStar was increasingly facing the prospect of bankruptcy. The company recently attempted to refinance some debt, but failed to reach an agreement with bondholders, according to a Sept. 23 filing.
    Akhavan said EchoStar has secured enough capital for a bright future but will not be making many big moves soon as it is still digesting the recent changes. He said the company would prioritize customer acquisition over expanding services.
    “We are as competitive as anybody else in terms of our offerings, whether it be price, whether it be coverage, whether it be quality,” he said.
    — CNBC’s Lillian Rizzo and Alex Sherman and Reuters contributed to this report.

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    China stocks just had their best day in 16 years, sending related U.S. ETFs soaring

    A shareholder at a securities hall in Hangzhou, the capital of Zhejiang province in east China, on Sept. 24, 2024.
    Cfoto | Future Publishing | Getty Images

    China stocks rallied Monday to their best day in 16 years, with related U.S. ETFs also rising after recent economic stimulus buoyed investor optimism in the market.
    The Shanghai Composite Index surged 8.06% in its best day since September 2008, and capping a nine-day win streak for the index. It ended September up 17.39%, its first monthly gain in five and its best monthly performance going back to April 2015.

    The Shenzhen Composite Index closed up 10.9%, its best day since April 1996. It gained 24.8% in September, its best month going back to April 2007.
    The China ADR index closed up 1.2%. It climbed nearly 6% earlier in the day.
    The U.S.-listed shares of online video company Bilibili and brokerage company Futu Holdings rose slightly.

    Stock chart icon

    China ADR Index

    The KraneShares CSI China Internet ETF (KWEB) gained 0.6%.
    Chinese stocks have been on a tear after Beijing last week unveiled a slew of economic stimulus measures including interest rate cuts to support the weak property market. On Thursday, state media said Chinese President Xi Jinping and other top leaders affirmed the measures.

    “While we don’t know for sure if there’s going to be enough to really kick the economy back into gear, it’s certainly the right first step,” said Art Hogan, chief market strategist at B. Riley Wealth. “I think the impact of a strengthening China can’t be underestimated.”
    “On balance, this is going to be an ambiguous positive for markets going forward,” he added. “And I think that there’s a lot of investors are going to have to quickly recalibrate their expectations.”
    More U.S. investors are bullish on the market following the move. Last week, billionaire hedge fund founder David Tepper said he is overwhelmingly bullish on Chinese equities, having bought “everything” related to China following the Federal Reserve’s recent rate cut.
    — CNBC’s Gina Francolla, Nick Wells, Lim Hui Jie and Evelyn Cheng contributed to this report.
    Correction: Art Hogan is chief market strategist at B. Riley Wealth. A previous version misstated his firm.

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    Why is Canada’s economy falling behind America’s?

    CANADA AND America’s economies are joined at the hip. Some $2bn of trade and 400,000 people cross their 9,000km of shared border every day. Canadians on the west coast do more day trips to nearby Seattle than to distant Toronto. No wonder, then, that the two economies have largely moved in lockstep in recent decades: between 2009 and 2019 America’s GDP grew by 27%; Canada’s expanded by 25%. More

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    Watch Fed Chair Jerome Powell speak live on economy, policy views

    [The stream is slated to start at 1:55 p.m. ET. Please refresh the page if you do not see a player above at that time.]
    Federal Reserve Chair Jerome Powell is set to speak Monday to the National Association for Business Economists during the organization’s annual conference in Nashville.

    The central bank chair is delivering his assessment on the economy as well as his policy views.
    Following the speech, Powell will speak in a moderated discussion with Ellen Zentner, global head of thematic and macro investing at Morgan Stanley Wealth Management.
    The speech comes less than two weeks after the rate-setting Federal Open Market Committee approved a half-percentage-point reduction in its key overnight borrowing rate, the first rate reduction in more than four years. Markets expect the Fed to follow up with additional cuts this year and in 2025 depending on the path of the economic data.
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    Why the Fed’s rate cut won’t immediately help car buyers or sales

    The Federal Reserve’s decision to cut interest rates for the first time in more than four years is expected to boost new vehicle sales, but not as quickly or by as much as some may expect.
    Auto loan rates remain near decades-high levels of more than 9.61% for a new vehicle and nearly 14% for a used car or truck, according to Cox Automotive.
    Auto loan changes can be delayed because they’re really a function of longer-term bond yields that are based on loan performances.

    Alex Tovstanovsky, owner of used-car dealer Prestige Motor Works, checks on inventory with his general manager Ryan Caton in Naperville, Illinois, May 28, 2020.
    Nick Carey | Reuters

    DETROIT — The Federal Reserve’s decision to cut interest rates for the first time in more than four years is expected to eventually boost new vehicle sales, but not as quickly or by as much as some may expect.
    The rate cut earlier this month by half a percentage point, or 50 basis points, will take time to trickle down to auto loan rates, which remain near decades-high levels of more than 9.61% for a new vehicle and nearly 14% for a used car or truck, according to Cox Automotive.

    “If the Fed is accurate in their forecasts, we will be living with rates more than two and a half points higher than most of the last 24 years,” said Cox Automotive chief economist Jonathan Smoke. “In other words, conditions will be better than what we’ve endured for the last year, but affordability challenges will not be solved by this new path for rates.”
    The biggest near-term improvement in auto loan rates isn’t expected until early next year, according to Smoke. He said that unlike the cost of home loans, which has come down in recent months, auto loan rate changes can be delayed because they’re really a function of longer-term bond yields that are based on loan performances.
    Auto loan 30-day delinquency rates have risen considerably in recent years, according to a Thursday note from the Board of Governors of the Federal Reserve System. Although they remain below the peak levels of the Great Recession, as of the end of 2023, auto loan delinquency rates exceeded pre-pandemic levels by about 60 basis points.

    In addition to the high interest rates, consumers continue to face near-record-high average new vehicle prices and inflated used vehicle prices. Both have fallen from peaks during the Covid pandemic and supply chain problems of recent years but remain elevated compared with historical levels.
    Edmunds.com reports average financing for a new vehicle was more than $40,700 in August, with a payoff term of 68.8 months, or 5.7 years. That compares with average financing before the pandemic of roughly $33,000 over 69.7 months, or 5.8 years, in September 2019.

    The difference in those payments over the terms of the deals is $3,162, or $178 more per month, according to Edmunds.
    “New vehicle sales fell slightly in Q3 as affordability challenges continued to loom large for American car shoppers in the form of historically elevated prices and interest rates,” said Jessica Caldwell, Edmunds’ head of insights.
    Should rates continue to decline, consumers will see some relief in monthly payments. BofA Securities estimates each point decrease in the Fed benchmark rate equates to a roughly $20 decrease in an average monthly payment for a new vehicle.
    — CNBC’s Michael Bloom contributed to this report. More