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ASML, a Dutch semiconductor equipment manufacturer, anticipates that the introduction of cost-effective AI models like China's DeepSeek will not reduce but rather increase the demand for AI chips. This perspective was shared by ASML's CEO Christophe Fouquet during an interview with CNBC, following a robust fourth-quarter performance where the company exceeded sales and profit expectations and reported an order backlog of approximately 36 billion euros. Despite the market's initial negative reaction to DeepSeek's R1 model, which rivals leading U.S. AI models in performance at a lower cost, ASML's shares rebounded as investor concerns about a potential decrease in semiconductor spending diminished. Fouquet highlighted that lower AI costs could lead to broader application, thereby increasing the need for more chips. He also noted that hyperscalers, like Microsoft and Google, continue to invest heavily in AI infrastructure, suggesting a sustained demand for advanced semiconductor technology. This outlook comes amidst discussions on the implications of DeepSeek's model on the AI industry, particularly concerning energy efficiency and cost reduction in AI technology.
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Robinhood has experienced significant growth in its cryptocurrency business, with a 700% increase in crypto revenue, as highlighted by Johann Kerbrat, Head of Crypto at Robinhood. This surge was attributed to heightened customer enthusiasm and the addition of new assets and features on the platform. The company's revenue in the fourth quarter surpassed $1 billion, driven by increased crypto trading activity during the 2024 presidential election, where one in seven voters identified as "crypto voters." Robinhood's performance significantly outperformed analyst expectations, beating estimates by $69.2 million. The platform serves a diverse customer base, from first-time investors interested in basic crypto trading to more seasoned traders who benefit from advanced trading tools like stop loss orders and technical analysis capabilities. Looking forward, Robinhood aims to further expand its offerings, especially for advanced traders, with the recent acquisition of Bitstamp. However, the sustainability of this growth into 2025 remains uncertain, depending largely on market conditions and user behavior trends.
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The article discusses the contrasting investment strategies of Strategy (formerly MicroStrategy) and MARA Holdings (formerly Marathon Digital) in relation to Bitcoin. Strategy, once a slow-growth software company, has pivoted to become the largest corporate holder of Bitcoin, amassing 450,000 Bitcoins by January 12 of the current year. This investment has significantly appreciated, now representing a substantial portion of its enterprise value. Despite its core business barely growing, Strategy continues to fund its Bitcoin acquisitions through debt and equity offerings, betting on Bitcoin's long-term value increase.
On the other hand, MARA has transformed from a patent holding company into a major Bitcoin miner, with significant mining capacity and daily Bitcoin production. However, its operational costs are high due to energy consumption, and these costs are expected to rise with each Bitcoin halving. MARA also dilutes its shares more aggressively to fund its operations. The article suggests that for investors bullish on Bitcoin, Strategy might be the better investment due to its lower operational costs and direct benefit from Bitcoin's price increase, whereas MARA's profitability is more dependent on external factors like energy costs and mining efficiency.
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At the "Views From Wall Street to Crypto" event in Consensus Hong Kong, experts from traditional finance (TradFi) discussed the evolution of the crypto ecosystem post the FTX collapse. They highlighted the advancements in technology, particularly in off-exchange settlement and asset custody, which have been driven by the entry of traditional players into the space. However, they stressed that more work is needed to make the industry robust. Key concerns include the need for continuous risk management, especially counterparty risk, which is heightened in crypto due to the absence of intermediaries. The discussion also touched on the importance of stress testing in markets like perpetual futures, where users can lose margin if stopped out. Transparency in innovation and ensuring liquidity without fragmentation were also emphasized as critical for regaining investor trust and stabilizing the market.
