😱 Bitcoin's "Halvening" is upon us

Tuesday, May 12, 2020 by Robinhood Snacks | Disclosures

The Halvening

Dow Jones
24,222 (-0.45%)
S&P 500
2,930 (+0.01%)
9,192 (+0.78%)
$8,724 (-0.21%)
10-Yr US Treasury

Hey Snackers,

After Netflix & Chill'd, Ben & Jerry's and Netflix are teaming up again for an aptly-timed new ice cream flavor: Chip Happens is a "cold mess of chocolate ice cream" with... wait for it ... potato chips. It has just been released in a "limited botch." Betcha can't eat just pun.

Markets were relatively still yesterday. The tech-heavy Nasdaq Composite outshone the S&P 500 and the Dow, gaining 0.78% to cap off a 6-day win streak (its longest this year).

1. Elon vs. California: if Tesla can't restart production, it might ditch the Golden State

Just got Elon'd... Tesla has officially filed a lawsuit against Alameda County, CA. The e-car hotshot says the county's order to keep Tesla's Fremont factory closed is unconstitutional, and threatened to leave California altogether:

  • The federal gov left reopening up to states — California allowed a phased opening of some businesses (including manufacturing) starting last Friday. But CA Gov. Gavin Newsom said local governments can keep stricter lockdown rules if they want.
  • Tesla argues Alameda's decision to keep closed is arbitrary — Tesla's distribution facility in nearby Lathrop has been allowed to operate. But Elon's beef with lockdown orders goes wayyy back to early March.

"Frankly, this is the final straw"... In a tweet-storm, a spurned Elon said Tesla will move its operations to Texas/Nevada immediately. But a Tesla exit would be a loss for California:

  • As one of the largest manufacturing employers in California and the only big CA-based car maker, Tesla created 51K jobs for the state (its Fremont factory alone employs 10K workers).
  • A Tes-xit would lose CA some serious tax $$$: In 2017, Tesla generated $4.1B in direct spending in CA — Elon could also save billions in taxes by moving Tesla HQ to Texas or Nevada (where state taxes are lower).

Big biz has sway over local government... While local government officials might overlook Elon's child being named "X Æ A-12," they'll have a harder time ignoring the loss of an economic powerhouse. Also, other CA companies could follow Elon's lead. Tesla knows this, and Elon ordered a restart of production in defiance of the public health order on Monday. Tesla has economic incentives to ditch, but risks losing concentrated engineering talent of the Bay Area (and local love).


Amazon and AMC sittin’ in a tree... M-E-R-G-I-N-G. Just as unconfirmed as that 2nd grade rumor about Billy and Sally, but more interesting. According to British tabloid Daily Mail (which we take with large grains of salt) Amazon is considering buying AMC. This potential melange piqued our acquisition fantasy (and made AMC stock soar 30%). Here's what Amazon could get:

  • (More) Influence: With 11K+ screens, AMC is the largest movie theater chain in the world — this would provide Amazon (even) more global reach. AMC also exerts significant influence over movie studios and execs (see: Trolls sequel drama).
  • (More) Prime benefits: Amazon could provide discounted movie tix for Prime members and/or free screenings for Amazon Studio-made films. Netflix bought movie theaters in NY and LA to screen its own films, but on a much smaller scale.
  • Also, Amazon is richer than ever on soaring sales, while AMC's stock value has collapsed 30% since late Feb — so it would be acquirin' at a discount.

Amazon wants it all... This reported acquisition can also be explained by Amazon's proclivity to world domination. It dominates ecommerce, it leads in cloud computing, it took on streaming, it birthed Alexa, and it even got into the grocery game. Now it would be coming for movie theaters.


But maybe AMC isn't the best acquisition target... Amazon's other physical retail-acquisition (Whole Foods) hasn't yet achieved its "affordable for everyone" promise, and Amazon's grocery operation is still lagging behind major retailers. Also, AMC is saddled with almost $5B in debt and a loss-making biz — that would become Amazon's problem if Bezos snatched it up.


Not a horror movie title... The Halvening. Bitcoin’s long-awaited block reward halving — the 3rd ever since the cryptocurrency's creation — happened (halvened?) yesterday. The reward for verifying a block of Bitcoin transactions has been cut in half from 12.5 Bitcoins to 6.25 (at $8.7K/Bitcoin, that's a $54K reward). A little background...

  • When bitcoin was created by the mysterious "Satoshi Nakamoto," he/she wanted to make sure people wouldn't use it fraudulently (like using the same coin twice), because then it could become worthless. Enter Bitcoin miners...
  • People "mine" Bitcoin by using a massive amount of computer power to verify the legitimacy of transactions on the block. With Bitcoin, there's no central bank to validate transactions (no Chase updating your latte purchase in-app) — so miners are critical.
  • Miners get rewarded in Bitcoin for successfully adding a block of transactions to the chain (aka updating "ledger").
  • Every 210K blocks (around every 4 years) the block reward is cut in half — in 2009 it was 50 BTC, in 2012 it was 25 BTC, in 2016 it was 12.5 BTC — now it's 6.25 BTC.

Curb your crypt-thusiasm... In addition to verifying the legit-ness of transactions, mining also introduces new coins into the system (like a central bank controlling the printing of $$$, but decentralized). Enter Satoshi's halving rule...

  • Halving the reward is a way to prevent inflation and control this new supply of bitcoin — slowing the creation of coins helps stabilize price.
  • Today, about 18.4M bitcoins have been mined out of the 21M that will ever be created — in 2140, all 21M coins will have been mined.


It's all about getting "priced in"... This event has been on calendars since 2016 and Halvenings have happened before. If all investors in the market know that same information (like they did), then they probably already reacted and planned for the Halvening beforehand. That means the event was “priced in” to the current price, so in theory the Halvening shouldn't move the price much — and it didn't. The price of a Bitcoin just inched down yesterday.

What else we’re Snackin’
  • Snacky: Pepsi launches a direct-to-consumer snacks website to cash in on online grocery demand (think Cheetos and Doritos delivery).
  • Test: The FDA grants emergency use authorization to Abbott Labs for its new coronavirus antibody test — Abbott plans to ship 30M tests this month.
  • DJ: Spotify launches a shared-queue feature called Group Sessions — now you don't have to fight for aux cord control at the (quarantine) party.
  • Drive: Online used car seller Vroom has reportedly filed for an IPO — it hopes to go public in June (though no one's really going for it right now).

🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Snacks Daily Podcast

We dive deep into the spicy, Tweet-filled battle between Elon and the state of California. We have entered peak "Musks" season.

Listen to our 15-minute podcast on Apple or Spotify.


Disclosure: Authors of this Snacks own shares of Amazon, Tesla, Spotify, and a Bitcoin

ID: 1183237

Subscribe to Robinhood Snacks

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2020 Robinhood. All rights reserved.