Latest news with #EricCroak
Yahoo
08-07-2025
- Business
- Yahoo
Robinhood has rolled out 'tokenized' stocks and ETFs. Here's what to know about the crypto-like assets.
Robinhood stock surged last week on news that the brokerage would offer tokenized stocks to users in Europe. Tokenization is the act of creating a digital representation of an asset on the blockchain. The technology could allow for more seamless trading, but investors should be aware of unique risks. Robinhood stock surged last week after the company announced that users in Europe would be able to trade "tokenized" versions of popular US stocks and ETFs, including shares of private companies like SpaceX and OpenAI. OpenAI ultimately responded by issuing a warning that it doesn't endorse the move and wasn't involved in issuing any equity to back these tokenized shares. Still, the excitement for the blockchain-enabled assets remains high, and Robinhood CEO Vlad Tenev brushed off OpenAI's concerns on Tuesday, adding that the firm is in talks with European regulators to start offering tokenized shares to users of its platform. Here's what to know about the crypto-like assets. "Tokenization" isn't a term many people outside the crypto community are probably familiar with. It's essentially the process of turning something into a digital token and securing it to the blockchain, which is the super-secure digital ledger that can track ownership or transactions and cannot be tampered with. It's the digital infrastructure that underpins bitcoin. Tokenization, the thinking goes, allows for faster trading and settlement, and allows for assets to be traded outside of normal exchange hours. Many things can be tokenized, in theory. If you recall the NFT craze, those were basically tokenized representations of digital artwork. For stocks, a tokenized version would be backed by the real thing. However, investors should be aware that the tokens might not necessarily be precisely correlated with the price of the underlying asset. Eric Croak, CFP, President of Croak Capital, noted that despite the terminology, tokenized shares of OpenAI and SpaceX are not equity by any standard legal definition. "You do not get ownership rights. You do not vote. You do not get a dividend," he stated. "In most cases, these tokens are just synthetic exposure, i.e., someone else owns the real thing and issues you a digital claim that tracks the price they assign. It's more like a futures contract dressed up as equity." Johnny Gabriele, head analyst of Blockchain Economics and AI Integration at The Lifted Initiative, provided further context on the move to tokenized private shares. "They don't need permission to tokenize an asset they already own," he noted. "However, that does make that a derivative of a private stock, which is very, very different from owning an equity that trades on the New York Stock Exchange." They're not available to everyone. Robinhood's rollout of tokenized stocks was extended to European users of its platform, and for the most part, US investors cannot trade them. Some firms are experimenting with tokenized assets on their own proprietary blockchains, but tokenized stock trading is mainly available to offshore investors. Simply putting something on the blockchain doesn't make it a safe investment. While OpenAI and SpaceX are two of the world's most valuable privately held companies, they aren't subject to the same financial disclosure requirements as public companies. Assessing whether investing in tokenized shares of private companies is a good idea can quickly become complicated. "Just because it's on a blockchain does not mean there is someone on the other side of the trade. Investors assume they can get out whenever they want, but many of these platforms have restrictions, lockups, or limits on how much you can sell at once." Ian Kane, founder and CEO of blockchain infrastructure firm Firepan, noted the opacity and legal ambiguity risks that come with owning tokenized shares. He described the dynamic as having economic exposure rather than an ownership stake. "Investors should scrutinize who's issuing the token, what legal rights are embedded, and how pricing is determined. If you can't get a clear answer in five minutes, walk away as it's either too complicated or too opaque for retail capital," he said. Regulation is also a challenge. Tokenization is a new frontier of finance, and the rules of the road are still being set. If a platform violates local regulations, investors could lose access to their accounts. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
08-07-2025
- Business
- Business Insider
Robinhood has rolled out 'tokenized' stocks and ETFs. Here's what to know about the crypto-like assets.
Robinhood stock surged last week after the company announced that users in Europe would be able to trade "tokenized" versions of popular US stocks and ETFs, including shares of private companies like SpaceX and OpenAI. OpenAI ultimately responded by issuing a warning that it doesn't endorse the move and wasn't involved in issuing any equity to back these tokenized shares. Still, the excitement for the blockchain-enabled assets remains high, and Robinhood CEO Vlad Tenev brushed off OpenAI's concerns on Tuesday, adding that the firm is in talks with European regulators to start offering tokenized shares to users of its platform. Here's what to know about the crypto-like assets. What are tokenized stocks? "Tokenization" isn't a term many people outside the crypto community are probably familiar with. It's essentially the process of turning something into a digital token and securing it to the blockchain, which is the super-secure digital ledger that can track ownership or transactions and cannot be tampered with. It's the digital infrastructure that underpins bitcoin. Tokenization, the thinking goes, allows for faster trading and settlement, and allows for assets to be traded outside of normal exchange hours. Many things can be tokenized, in theory. If you recall the NFT craze, those were basically tokenized representations of digital artwork. For stocks, a tokenized version would be backed by the real thing. However, investors should be aware that the tokens might not necessarily be precisely correlated with the price of the underlying asset. Eric Croak, CFP, President of Croak Capital, noted that despite the terminology, tokenized shares of OpenAI and SpaceX are not equity by any standard legal definition. "You do not get ownership rights. You do not vote. You do not get a dividend," he stated. "In most cases, these tokens are just synthetic exposure, i.e., someone else owns the real thing and issues you a digital claim that tracks the price they assign. It's more like a futures contract dressed up as equity." Johnny Gabriele, head analyst of Blockchain Economics and AI Integration at The Lifted Initiative, provided further context on the move to tokenized private shares. "They don't need permission to tokenize an asset they already own," he noted. "However, that does make that a derivative of a private stock, which is very, very different from owning an equity that trades on the New York Stock Exchange." Who can trade these assets? They're not available to everyone. Robinhood's rollout of tokenized stocks was extended to European users of its platform, and for the most part, US investors cannot trade them. Some firms are experimenting with tokenized assets on their own proprietary blockchains, but tokenized stock trading is mainly available to offshore investors. How should investors think about owning tokenized stocks vs. the real thing? Simply putting something on the blockchain doesn't make it a safe investment. While OpenAI and SpaceX are two of the world's most valuable privately held companies, they aren't subject to the same financial disclosure requirements as public companies. Assessing whether investing in tokenized shares of private companies is a good idea can quickly become complicated. "Just because it's on a blockchain does not mean there is someone on the other side of the trade. Investors assume they can get out whenever they want, but many of these platforms have restrictions, lockups, or limits on how much you can sell at once." Ian Kane, founder and CEO of blockchain infrastructure firm Firepan, noted the opacity and legal ambiguity risks that come with owning tokenized shares. He described the dynamic as having economic exposure rather than an ownership stake. "Investors should scrutinize who's issuing the token, what legal rights are embedded, and how pricing is determined. If you can't get a clear answer in five minutes, walk away as it's either too complicated or too opaque for retail capital," he said. Regulation is also a challenge. Tokenization is a new frontier of finance, and the rules of the road are still being set. If a platform violates local regulations, investors could lose access to their accounts.
Yahoo
25-06-2025
- Business
- Yahoo
5 Ways Tariffs Could Affect the Upper-Middle Class
While the upper middle class is more insulated than lower-income groups from ever-changing tariff policies, they can still expect some pain on the horizon. Be Aware: Find Out: Watch out for these five ways tariffs could affect the upper middle class — and plan accordingly. Inflation has remained more muted than expected, as importers rushed to stockpile inventories in the first quarter of 2025. But those inventories are already dwindling, and the third quarter could see inflation heat up again. 'Tariffs will impact the upper-middle class's buying power as both core material and discretionary materials increase in costs,' explains Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'Items like electronics, clothing, household products and cars will be impacted.' Read More: That loss of purchasing power will prevent the upper-middle class from buying the brands and small luxuries they enjoy. In some cases, it will become harder or even impossible to find some imported goods. That could mean certain wines doubling in price, or no longer imported at all. Or French cheeses, or perfumes, or fast fashion lines that are no longer affordable enough to justify their low-build quality. The June Blue Chip Economic Indicators survey by Wolters Kluwer shows economists projecting slower growth in both 2025 and 2026. As recently as February, economists projected GDP growth of 2.2% for 2025 and 2.0% for 2026. By June, the consensus forecast for both dropped to an anemic 1.4%. Recession risk also remains elevated. The survey of economists forecasts a 41% chance of recession in the US over the next 12 months. Slow or negative GDP growth adds to the risk of job loss for the upper-middle class just like everyone else. Or, more likely, the risk of reduced income or no rise in income — even as inflation drives up costs. Again, that could leave many in the upper-middle class with less purchasing power. Stagnating economic growth certainly doesn't do investment portfolios any favors. From 2015 to 2024, the S&P 500 has delivered an average annual return of 14.1%, according to data from The Motley Fool. The next decade may not prove so fruitful for investors. 'Upper-middle-class investors hold ETFs and mutual funds packed with global manufacturers and importers,' notes Eric Croak, the certified financial planner (CFP) behind Croak Capital. 'Tariffs squeeze margins on those companies. Dividends shrink, share prices dip, future earnings soften. These investors could find themselves stuck between cashflow drag and asset underperformance.' Many upper-middle class families want to cover college costs for their children. Expect that to get harder, between tuition, books and housing inflation, combined with weaker income and investment growth. But higher education also stands to become more expensive due to less subsidization by foreign students. 'Many colleges and universities depend on foreign students who pay full tuition as a means to subsidize other students' grants and scholarships,' added Hafezi. 'Less money for scholarships and grants, combined with higher costs and inflation, will drive up costs for American families.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 8 Common Mistakes Retirees Make With Their Social Security Checks How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 5 Ways Tariffs Could Affect the Upper-Middle Class Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
5 Ways Tariffs Could Affect the Upper-Middle Class
While the upper middle class is more insulated than lower-income groups from ever-changing tariff policies, they can still expect some pain on the horizon. Be Aware: Find Out: Watch out for these five ways tariffs could affect the upper middle class — and plan accordingly. Inflation has remained more muted than expected, as importers rushed to stockpile inventories in the first quarter of 2025. But those inventories are already dwindling, and the third quarter could see inflation heat up again. 'Tariffs will impact the upper-middle class's buying power as both core material and discretionary materials increase in costs,' explains Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'Items like electronics, clothing, household products and cars will be impacted.' Read More: That loss of purchasing power will prevent the upper-middle class from buying the brands and small luxuries they enjoy. In some cases, it will become harder or even impossible to find some imported goods. That could mean certain wines doubling in price, or no longer imported at all. Or French cheeses, or perfumes, or fast fashion lines that are no longer affordable enough to justify their low-build quality. The June Blue Chip Economic Indicators survey by Wolters Kluwer shows economists projecting slower growth in both 2025 and 2026. As recently as February, economists projected GDP growth of 2.2% for 2025 and 2.0% for 2026. By June, the consensus forecast for both dropped to an anemic 1.4%. Recession risk also remains elevated. The survey of economists forecasts a 41% chance of recession in the US over the next 12 months. Slow or negative GDP growth adds to the risk of job loss for the upper-middle class just like everyone else. Or, more likely, the risk of reduced income or no rise in income — even as inflation drives up costs. Again, that could leave many in the upper-middle class with less purchasing power. Stagnating economic growth certainly doesn't do investment portfolios any favors. From 2015 to 2024, the S&P 500 has delivered an average annual return of 14.1%, according to data from The Motley Fool. The next decade may not prove so fruitful for investors. 'Upper-middle-class investors hold ETFs and mutual funds packed with global manufacturers and importers,' notes Eric Croak, the certified financial planner (CFP) behind Croak Capital. 'Tariffs squeeze margins on those companies. Dividends shrink, share prices dip, future earnings soften. These investors could find themselves stuck between cashflow drag and asset underperformance.' Many upper-middle class families want to cover college costs for their children. Expect that to get harder, between tuition, books and housing inflation, combined with weaker income and investment growth. But higher education also stands to become more expensive due to less subsidization by foreign students. 'Many colleges and universities depend on foreign students who pay full tuition as a means to subsidize other students' grants and scholarships,' added Hafezi. 'Less money for scholarships and grants, combined with higher costs and inflation, will drive up costs for American families.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 8 Common Mistakes Retirees Make With Their Social Security Checks How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 5 Ways Tariffs Could Affect the Upper-Middle Class
