Markets
Robinhood buys crypto exchange Bitstamp in surprise $200 million deal
Robinhood announced Thursday that it has acquired Bitstamp, one of the world’s oldest cryptocurrency exchanges, in an all-cash transaction expected to be worth around $200 million. The acquisition, which is expected to be completed in the first half of 2025, will advance one of Robinhood’s strategic objectives by expanding the company’s presence in foreign markets.
Bitstamp has been a staple of the crypto industry since 2011, when it launched in Slovenia and later moved to Luxembourg and the United Kingdom. Its market share has declined in recent years, however, and despite four to five million customers, Bitstamp now ranks 16th among exchanges. volume among cryptocurrency exchanges. Its largest market remains Europe, but it also has customers in the United Kingdom, Asia and the United States.
In an interview with Fortune, Robinhood Crypto CEO Johann Kerbrat highlighted that Bitstamp has 50 active licenses across the world and the exchange also does strong trading with institutions. He added that the deal would be an important first step toward another of Robinhood’s strategic priorities, which is building an institutional business to complement its fast-growing consumer product line.
The acquisition comes as a surprise since there had been no reports of the Bitstamp sale and Robinhood is rebounding from a brutal 2023 that saw the price of its shares, which currently trade around $22, fall as much as at $7. The downturn, which gave rise to rumors that Robinhood had become an acquisition target, was part of a broader reckoning that cast doubt on the overall health of the financial technology sector.
In 2024, the story has been much different for Robinhood as the company reported record first-quarter profits and announced a billion-dollar stock last week. redeem. In the meantime, the company began to move away from the feast-or-famine stock trading business, adding services such as credit card and retirement accounts less subject to market fluctuations.
Robinhood’s acquisition of Bitstamp coincides with a huge rise in crypto markets that has seen the price of Bitcoin rise more than 60% since the start of the year, and the company publishes a triple increase in crypto revenue during the first quarter.
The deal also has the potential to transform Robinhood’s current crypto operations, which primarily revolve around sourcing Bitcoin and other currencies from market makers. By acquiring Bitstamp, Robinhood will instead be able to source crypto from its own exchange and potentially invite customers to trade there. Bitstamp also offers up to 85 digital tokens on some of its marketplaces, compared to a dozen offered by Robinhood, as well as loans and staking services.
Any attempt by Robinhood to increase its crypto offerings in the United States could face scrutiny from the Securities and Exchange Commission, which signaled in May that it planned to sue the company over its offerings of tokens. The SEC’s move is part of a broader attack on the crypto industry, but one that may be underway. a fragile legal basis because courts and elected officials have accused the agency of going too far.
As for whether Bitstamp will remain a standalone brand or be rebranded as a Robinhood product, Kerbrat said it’s premature to say since the deal won’t close until next year.
The acquisition comes nearly a year after reports that Bitstamp was in talks raise funds to expand its operations in the UK and Asia. At the time, the company’s CEO, Jean-Baptiste Graftieaux, said the company was not looking to sell itself.
In Robinhood’s press release announcing the acquisition, Gratfieaux said: “Integrating Bitstamp’s platform and expertise into the Robinhood ecosystem will provide users with an enhanced trading experience with a continued commitment to compliance, security and customer focus.
Barclays Capital served as financial advisor to Robinhood for the deal, while Galaxy Digital Partners served as advisor to Bitstamp.