With its largest-ever deal, trading platform Robinhood Markets said on Thursday that it has reached an agreement to purchase cryptocurrency exchange Bitstamp for about $200 million in cash. This move will accelerate an even bigger push into digital assets.
Before the bell, Robinhood’s stock was up 3.4%. The company has been trying to grow its product line in order to become a full-fledged provider of financial services.
With the purchase of Bitstamp, an organization that was established in 2011 and now has 50 active licenses and registrations worldwide, Robinhood will now be directly competing with major players in the market like Binance and Coinbase.
With over 85 tradable assets, Bitstamp’s primary spot exchange enjoys considerable popularity in Europe and Asia. The acquisition is anticipated to fuel the expansion of Robinhood.
“We are eager to continue growing both inside and outside of the EU, where we are still in our early stages. The vice president and general manager of Robinhood Crypto, Johann Kerbrat, told Reuters that “the acquisition of Bitstamp will accelerate our global expansion.”
The agreement, which is anticipated to finalize in the first half of 2025, coincides with the company’s fast expansion in the cryptocurrency space and the regulatory challenges it faces in the US.
According to Kerbrat, the business plans to be in constant contact with authorities as it advances.
In May, Robinhood’s first-quarter earnings beat was largely driven by its crypto business. However, the same week, the company revealed that it had received a “Wells notice” about tokens traded on its platform from the U.S. Securities and Exchange Commission.
When a corporation is the target of an enforcement action by the regulator, the notification is sent.
Cryptocurrency tokens, according to the markets regulator, ought to be regarded as securities and registered under its regulations. However, cryptocurrency companies maintain that the SEC has gone too far with its regulations.
This year, Robinhood’s stock has increased 69% after the company said that it will be concentrating on “profitable growth”. In light of the growing popularity of cryptocurrencies and the revival of retail trading, analysts predict it is poised for further growth.
Bitstamp and Robinhood have exclusive financial advisers in Galaxy Digital and Barclays Capital, respectively.
