On June 6th, according to official sources, Robinhood announced its acquisition of the global cryptocurrency exchange platform Bitstamp. As a result, Robinhood’s stock price rose by 2.27% in pre-market trading.
Johann Kerbrat, the head of Robinhood Crypto, expressed his views on the acquisition of Bitstamp, stating that it is an important step for Robinhood’s development in the cryptocurrency business. This acquisition aims to expand business operations outside the United States and welcome institutional clients to join Robinhood.
After 13 years of hard work, closing the deal at $200 million
For this acquisition, Robinhood expects the final transaction price to be approximately $200 million in cash, subject to customary adjustments. The acquisition is subject to customary closing conditions, including regulatory approval, and is expected to be completed in the first half of 2025. Barclays Capital Inc. is serving as Robinhood’s exclusive financial advisor, while Galaxy Digital Partners LLC is serving as Bitstamp’s exclusive financial advisor.
As early as May of last year, Ripple had already announced that it had acquired a minority stake in the cryptocurrency exchange platform Bitstamp from Pantera Capital in the first quarter, without disclosing the specific percentage. Galaxy Digital provided advisory services for this transaction.
Established in 2011, Bitstamp has offices in Luxembourg, the UK, Slovenia, Singapore, and the United States. According to The Block’s data dashboard, based on trading volume, as of last year, Bitstamp was the fifteenth largest spot cryptocurrency exchange platform globally.
It is worth mentioning that Bitstamp has been known for its compliance and has been compared to Coinbase. Following approvals in France, Spain, and Italy, Bitstamp became one of only two cryptocurrency-related companies approved by the UK Financial Conduct Authority (FCA) in June last year. Even Ethereum founder Vitalik Buterin has transferred ETH to Bitstamp multiple times.
However, in recent years, Bitstamp has struggled to cope with regulatory pressures and has gradually faded from the public eye. In fact, since last year, Bitstamp has been steadily shrinking its operations in North America, reducing and then banning operations related to the United States and Canada. In mid-October, Bitstamp’s US CEO and Global Chief Business Officer, Bobby Zagotta, urged customers to withdraw their funds by January 2024.
Not only has Bitstamp contracted its operations in foreign markets, but it has also faced a talent drain internally. Following the departure of former CEO Julian Sawyer before 2020, a large number of project consultants also chose to leave Bitstamp in March last year. According to DLNews, Bitstamp’s staff has decreased from around 650 to 450, a reduction of about 30%.
Now, after 13 years in operation, this long-standing exchange has been acquired for $200 million. Bitstamp CEO JB Graftieaux emphasized that Bitstamp’s platform and expertise will be integrated into Robinhood’s ecosystem, providing users with a better trading experience while continuing to focus on compliance, security, and customer-centric services.
Will Robinhood bring more possibilities to the cryptocurrency world?
Robinhood’s rise can be attributed to the myth of the “retail investor battle against Wall Street,” which also led to its involvement in cryptocurrencies, providing early liquidity to meme coin pioneer DOGE.
Since then, Robinhood has ventured into the cryptocurrency field multiple times, with its cryptocurrency business being a key driver of the company’s growth. According to official data, by the end of last year, the increase in cryptocurrency trading users on the platform led to a 10% year-on-year growth in cryptocurrency trading revenue in the fourth quarter, reaching $43 million. By this year, the first-quarter nominal trading volume of cryptocurrencies increased significantly by 224% year-on-year, reaching $36 billion.
Furthermore, Robinhood has collaborated with leading projects in the industry. On May 4th, Uniswap Labs announced a partnership with Robinhood, with the Uniswap mobile app subsequently adding support for transfers from Coinbase and Robinhood. On June 5th, Robinhood Crypto EU announced on social media that TON had been launched in some EU jurisdictions, becoming the third cryptocurrency after BONK and USDC.
On May 30th, Robinhood announced the release of its cryptocurrency trading application programming interface (API) to US users. This API allows American traders to set up automated trading strategies. With the acquisition of Bitstamp, this strategic combination will enable Robinhood to expand more effectively outside the United States.
In addition, Bitstamp holds more than 50 valid licenses and registrations worldwide, offering over 85 tradable assets on its core spot exchange, as well as products like staking and lending, which will enhance Robinhood’s cryptocurrency products.
Previously, the listing of WIF on Robinhood caused its price to break $1, making it the first meme coin to surpass this milestone. The successful acquisition may bring more platform users and cryptocurrency funds to Robinhood, with meme coins on Robinhood possibly being integrated with Bitstamp, continuing the “beneficial myth” started by DOGE and WIF.
