Cryptocurrency platform Robinhood expands its reach through a $200 million partnership with Bitstamp
In a significant move to broaden its participation in the evolving crypto value chain, Robinhood, the popular US-based trading platform, has agreed to acquire Luxembourg-based crypto exchange Bitstamp for $200 million. The acquisition, set to close in the first half of 2025, marks a significant step in Robinhood's global expansion, particularly in the European Union.
Bitstamp, operational since 2011, brings over a decade of crypto trading experience to the table. The exchange holds more than 50 active licenses and registrations globally and boasts a monthly notional crypto trading volume that nearly tripled year over year in April 2024.
For Robinhood, the acquisition offers a chance to expand geographically, diversify from its day-trading core, and bring in institutional customers for the first time. The move also allows Robinhood to connect more deeply in the crypto ecosystem by offering more tokens to back assets and securities.
Bitstamp currently lists over 85 crypto assets, significantly more than the 15 offered to US retail investors on Robinhood. The acquisition will provide Bitstamp users with an enhanced trading experience, with a focus on compliance, security, and customer-centricity, as stated by JB Graftieaux, Bitstamp's CEO.
Robinhood has been cautious in its crypto offerings, avoiding services such as staking or lending that have sparked SEC action against other crypto firms. However, buying Bitstamp would give Robinhood access to the lending and staking products the exchange already offers outside the US.
The acquisition comes a month after the Securities and Exchange Commission sent Robinhood a Wells notice, indicating it intends to sue over the firm's US crypto business. Despite this, Robinhood's crypto business is experiencing rapid growth, contributing to 17% of the company's transaction-based revenues in 2023.
In the first quarter of 2024, Robinhood's crypto revenue jumped to $126 million, a significant increase from $38 million in the same quarter of the previous year. Crypto assets under Robinhood's custody more than doubled to $26 billion as of March 31, 2024, compared to the same date in the previous year.
Vincent Kerbrat, Robinhood's Chief Strategy Officer, praised Bitstamp for demonstrating resilience through market cycles and establishing a strong reputation among retail and institutional crypto investors. He also mentioned the possibility of purchasing licensing rights for further expansion.
With this acquisition, Robinhood aims to position itself as a major player in the global crypto market, offering a wider range of crypto assets and services to its users while maintaining its focus on compliance and customer service.
