Robinhood Acquire Bitstamp For $200 Million

An Article on Robinhoods recent $200 million acquisition of BitStamp

tah_eth

Posted on Jun 6, 2024

On Thursday 6th June, Robinhood announced its acquisition of Bitstamp, one of the oldest cryptocurrency exchanges, in an all-cash deal valued at approximately $200 million. The acquisition, set to finalize in the first half of 2025, aims to strengthen Robinhood's footprint in international markets.

Bitstamp, established in Slovenia in 2011 and later relocating to Luxembourg and the UK, has been a notable presence in the crypto industry. However, in recent years, its market share has dwindled. Despite a customer base of four to five million, Bitstamp now ranks 16th in trading volume among crypto exchanges, with its strongest market being Europe, followed by significant users in the UK, Asia, and the U.S.

Johann Kerbrat, Robinhood Crypto’s General Manager, highlighted Bitstamp's extensive global reach, noting that it holds 50 active licenses and engages in substantial institutional trading. He emphasized that this acquisition aligns with Robinhood's strategy to "develop an institutional business to enhance its growing range of consumer products".

The deal came unexpectedly, as there had been no prior indications that Bitstamp was for sale. This move is especially noteworthy given Robinhood's recovery from a challenging 2023, where its stock price dropped to $7, sparking rumours of it being an acquisition target.

By acquiring Bitstamp, Robinhood could transform its current crypto operations. Currently, Robinhood's crypto services primarily involve sourcing Bitcoin and other cryptocurrencies from market makers. With Bitstamp, Robinhood gains the capability to source crypto directly from its own exchange, and it may open the platform for its customers to trade there.