New York, NY – Robinhood made a significant move in the cryptocurrency market by announcing its acquisition of Bitstamp, one of the world’s oldest cryptocurrency exchanges. This all-cash deal, expected to be valued at around $200 million, is projected to close in the first half of 2025. By acquiring Bitstamp, Robinhood aims to expand its presence in international markets, aligning with its strategic objectives.
Bitstamp, which has been operating in the crypto industry since 2011, initially in Slovenia before relocating to Luxembourg and the U.K., has seen a decline in its market share in recent years. Despite having millions of customers globally, Bitstamp currently ranks as the 16th largest cryptocurrency exchange in terms of trading volume. Its primary market remains in Europe, but it also serves customers in the U.K., Asia, and the U.S.
Johann Kerbrat, General Manager of Robinhood Crypto, highlighted in an interview with Fortune that Bitstamp holds 50 active licenses worldwide and conducts significant trading with institutional clients. This acquisition marks a crucial step for Robinhood in developing its institutional business, complementing its expanding range of consumer products.
The unexpected acquisition of Bitstamp comes as Robinhood rebounds from a challenging 2023, where its share price plummeted to as low as $7 amidst rumors of a potential takeover. However, in 2024, Robinhood has shown a remarkable turnaround by reporting record earnings in the first quarter and initiating a $1 billion stock buyback program. The company has also diversified its offerings beyond stock trading to include services like credit cards and retirement accounts.
With the recent surge in crypto markets, highlighted by a significant increase in Bitcoin’s price and tripled crypto revenue for Robinhood in the first quarter, the acquisition of Bitstamp presents an opportunity to enhance the company’s crypto operations. By leveraging Bitstamp’s offerings, which include a wide range of digital tokens and services like staking, Robinhood can further expand its crypto trading capabilities.
However, any plans for Robinhood to enhance its crypto offerings in the U.S. may face regulatory scrutiny from the Securities and Exchange Commission, which has signaled intentions to sue the company over its token offerings. Despite regulatory challenges, the acquisition of Bitstamp signals Robinhood’s commitment to growing its presence in the cryptocurrency market.
As the deal is set to close next year, the fate of Bitstamp as a stand-alone brand or as a rebranded Robinhood product remains uncertain. According to Kerbrat, decisions regarding branding will be made in due course, following the completion of the acquisition process.
The acquisition of Bitstamp by Robinhood comes on the heels of reports from a year ago indicating Bitstamp’s discussions to raise funds for expansion, with the company’s CEO stating no intention to sell itself at the time. In a press release announcing the acquisition, Bitstamp’s CEO expressed optimism about the merger, emphasizing enhanced trading experiences with a focus on compliance, security, and customer-centric services.
Barclays Capital served as Robinhood’s financial advisor for the deal, with Galaxy Digital Partners advising Bitstamp, underscoring the strategic significance of the acquisition in the evolving cryptocurrency landscape.