With its largest-ever transaction, 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 accelerates a larger push into digital assets.
The 11-year-old trading app, which is well-liked by individual traders, has been aiming to grow into a more comprehensive financial services provider by adding more products to its portfolio.
With the acquisition of Bitstamp, an organization that was established in 2011 and currently has 50 active licenses and registrations worldwide, Robinhood will now face off against major players in the market like Binance and Coinbase.
Bitstamp is expected to become Robinhood Crypto’s first institutional business and will fuel its expansion. The main spot exchange for Bitstamp, which is well-liked in Europe and Asia, offers more than 85 tradable assets along with lending and staking services.
“We are eager to continue growing both inside and outside of the EU, where we are still in our early stages. The acquisition of Bitstamp will quicken our global expansion, according to Reuters, which was said by Johann Kerbrat, Vice President and General Manager of Robinhood Crypto.
The agreement, which is anticipated to finalize in the first half of 2025, coincides with the company’s rapid growth in the cryptocurrency space, which is hampered by US legal restrictions.
According to Kerbrat, the business plans to stay in constant contact with authorities as it advances.
The reason behind Robinhood’s impressive first-quarter earnings beat in May was its cryptocurrency business, but the same week it also revealed that it had gotten a “Wells” notice from the U.S. Securities and Exchange Commission. The warning suggests that an enforcement action may soon be taken.
Cryptocurrency tokens, according to the markets regulator, ought to be regarded as securities and registered under its regulations. However, cryptocurrency companies have charged that the SEC has gone too far.
This year, Robinhood’s stock has increased 69% after the company pledged to pursue “profitable growth.” In light of the growing popularity of cryptocurrencies and the revival of retail trading, analysts predict it is poised for further growth.