Is FTX gearing up for a Robinhood takeover?

The cryptocurrency exchange announced that select users in the U.S. have access to commission-free trading for hundreds of exchange-listed securities, including both stocks and ETFs.

Why should we care?
FTX is directly competing with Robinhood, Cash App, and Public.com by offering both stock and crypto trading. And notably, FTX’s founder, Sam Bankman-Fried (or SBF), disclosed that he purchased a 7.6% stake in Robinhood earlier this month, raising the question of a Robinhood takeover by SBF à la Elon Musk and Twitter. If, as The FR reported earlier this month, institutions like Goldman Sachs or Fidelity are eying a Robinhood acquisition as well, then we may see several factions jockeying for a takeover. Interestingly—and prudently—FTX is rejecting a payment-for-order-flow (PFOF) model for stock trades due to the practice’s potential ban by the SEC. FTX may have opted for a non-PFOF model to both dodge regulatory oversight as well as prepare for an infrastructural overhaul within Robinhood if FTX acquires it. Regardless of whether FTX takes over Robinhood or not, FTX’s move into stocks reflects changing consumer priorities. Retail investors are increasingly interested in the long term, rather than in short-term gains, making the potential losses of a commission-free stock trade outside PFOF models a smaller concern, though potentially costly at scale.