On the evening of Beijing time (November 21), CNBC quoted sources as saying that the largest US brokerage, Charles Schwab, is negotiating to acquire TD Securities. If Charles Schwab’s acquisition of TD Securities is successful, the total assets of the two brokers will reach 5 Trillions of dollars. Some analysts pointed out that the incident is likely to have an indirect impact on the seemingly unrelated bitcoin market.
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FOX business journalist Maria Bartiromo quoted an anonymous source as saying that the merger "has been completed." It is expected to be officially announced today. Wells Fargo senior analyst Mike Mayo said in a report to clients on Thursday: "(Jiaxin Finance's acquisition of TD Securities) will create a giant in the field of wealth management." Affected by this news, US stocks before the market, TD Securities soared 24%, and Charles Schwab also rose 10%.
The deal between Charles Schwab and TD Securities will consolidate the US securities brokerage industry that is undergoing massive disruption. For example, in recent months, several major US brokers have introduced zero commission plans. Charles Schwab is also one of the first major US brokerages to begin implementing the zero commission policy. Since the introduction of the zero commission policy, the company’s commission income per quarter reached 90 million to 100 million dollars, so it was invested in the initial stage of the policy. The fear that the loss of commission income will put pressure on the profit margin of Charles Schwab, the stock price of this brokerage is also under pressure.
However, due to the strong profit from last month, Schwab’s share price has rebounded. Charles Schwab said last week that for new customer accounts, zero commission is creating huge returns for the company – an additional 142,000 in October The brokerage account increased by 31% from September and 7% from October last year. The increase in new accounts also allowed Charles Schwab’s client assets to reach a record $3.85 trillion.
The impact of the two major securities giants "marriage" on the market is likely to spread to the bitcoin market. As early as 2017, TD Securities has begun to provide trading services for Bitcoin futures contracts. At present, the “giants” of traditional financial markets such as Fidelity and Intercontinental Exchange have already laid out the cryptocurrency market. Therefore, the indirect influence of the “big event” of the capital market on the price of bitcoin cannot be ignored.
Previously, there has been market analysis that the birth of Bitcoin futures will facilitate market speculation, and short entry will have a very significant inhibitory effect on Bitcoin prices. This point has indeed been verified to some extent in the trend of bitcoin prices after the CME Bitcoin futures contract is launched.
With the merger of the two major brokers, it is likely that more investors and more funds will enter the Bitcoin futures market. If the regular conclusions continue to take effect, this is likely to be the future price trend of Bitcoin. There will be significant negative effects. Therefore, for digital currency investors, the potential risks of this event must be emphasized in the short term.