Robinhood Markets Inc. is buying crytocurrency exchange Bitstamp for about $200 million in cash as the company looks to speed up its cryptocurrency expansion globally.
Bitstamp, founded in 2011, has offices in Luxembourg, the UK, Slovenia, Singapore, and the US. It has more than 50 active licenses and registrations worldwide and customers across the European Union, United Kingdom, United States and Asia.
Robinhood said Thursday that this will be its first institutional business.
“Bitstamp’s highly trusted and long standing global exchange has shown resilience through market cycles. By seamlessly coupling customer experience with safety across geographies, the Bitstamp team has established one of the strongest reputations across retail and institutional crypto investors,” Johann Kerbrat, general manager of Robinhood Crypto, said in a statement. “Through this strategic combination, we are better positioned to expand our footprint outside of the U.S. and welcome institutional customers to Robinhood.”
The deal is expected to close in the first half of next year.
The news comes a month after Robinhood Markets announced that it had received a notice from the Securities and Exchange Commission about alleged securities violations at its crypto division.
The company said in a regulatory filing that it received investigative subpoenas from the SEC about issues including cryptocurrency listings, custody of cryptocurrencies, and platform operations.
Robinhood Crypto has cooperated with the investigation, the company said.
Shares of Robinhood Markets rose more than 2% before the market open.
Robinhood, the popular commission-free trading app, has made a major move in the cryptocurrency space by acquiring Bitstamp, one of the oldest and most reputable cryptocurrency exchanges in the world. The deal, which is said to be worth approximately $200 million, marks a significant milestone for both companies and highlights the growing importance of cryptocurrencies in the financial industry.
Bitstamp, founded in 2011, has built a strong reputation for its reliability, security, and user-friendly interface. It is one of the few cryptocurrency exchanges that is fully regulated and licensed, making it a trusted platform for both retail and institutional investors. With over 4 million registered users and a daily trading volume of over $1 billion, Bitstamp has established itself as a key player in the cryptocurrency market.
On the other hand, Robinhood has quickly risen to prominence as a leading trading platform for stocks, options, and cryptocurrencies. Launched in 2013, Robinhood gained popularity for its commission-free trading model and user-friendly interface, attracting millions of users, particularly younger investors who are looking to trade digital assets.
By acquiring Bitstamp, Robinhood is looking to expand its presence in the cryptocurrency market and offer its users access to a wider range of digital assets. This move comes at a time when interest in cryptocurrencies is at an all-time high, with Bitcoin reaching new record highs and other digital assets gaining traction among investors.
The acquisition of Bitstamp also highlights the increasing consolidation in the cryptocurrency industry, as larger players seek to expand their market share and offer more comprehensive services to their users. With regulatory scrutiny increasing and competition growing fiercer, companies like Robinhood are looking to strengthen their position by acquiring established players like Bitstamp.
Overall, the acquisition of Bitstamp by Robinhood is a significant development in the cryptocurrency industry and signals the growing mainstream acceptance of digital assets. As more traditional financial institutions and companies enter the space, it is clear that cryptocurrencies are here to stay and will continue to play a key role in the future of finance.
