Robinhood, the popular trading platform known for its zero-fee commission, has announced its plans to acquire the crypto exchange Bitstamp in a $200 million cash deal. This move is part of Robinhood’s strategy to expand its presence in the digital assets market and cater to new-age investors.
Bitstamp, founded in 2011 and holding 50 active licenses and registrations worldwide, is a well-established player in the cryptocurrency industry, particularly popular in Asia and Europe. The acquisition of Bitstamp will position Robinhood in direct competition with industry giants like Binance and Coinbase, while also enabling the growth of Robinhood Crypto’s institutional business.
Johann Kerbrat, Vice President and General Manager of Robinhood Crypto, expressed excitement about the acquisition, stating, “We are in our early days in the EU and we are excited to keep expanding there and beyond. The acquisition of Bitstamp will accelerate our global expansion.”
The completion of the Bitstamp acquisition is expected by 2025, as Robinhood navigates through a period of rapid growth and regulatory challenges in the United States. Despite its impressive first-quarter earnings driven by its crypto business, Robinhood recently disclosed receiving a ‘Wells’ notice from the US Securities and Exchange Commission, indicating potential enforcement action.
The regulatory landscape surrounding cryptocurrencies has been a point of contention between the SEC and crypto firms, with the SEC advocating for treating cryptocurrencies as securities subject to registration rules. However, crypto firms have accused the SEC of overreach in their regulatory efforts.
Despite these challenges, Robinhood’s stock price has surged by 69% this year, fueled by the company’s commitment to pursuing profitable growth. Analysts anticipate further gains for Robinhood, driven by a resurgence in retail trading and the increasing adoption of cryptocurrencies.
Overall, the acquisition of Bitstamp marks a significant milestone for Robinhood as it seeks to expand its presence in the global digital assets market and solidify its position as a full-fledged financial service provider catering to a new generation of investors.