📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Robinhood bets big on crypto with $200 million deal for Bitstamp

Published 06/06/2024, 07:01 AM
Updated 06/06/2024, 09:35 AM
© Reuters. The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021.  REUTERS/Andrew Kelly

By Manya Saini

(Reuters) -Trading platform Robinhood (NASDAQ:HOOD) Markets said on Thursday it has agreed to buy crypto exchange Bitstamp for about $200 million in cash, speeding up a broader push into digital assets with its biggest-ever deal.

Robinhood, whose shares were up 3.4% before the bell, has been looking to expand its product offerings to become a full-fledged financial services provider.

The acquisition of Bitstamp, which was founded in 2011 and holds 50 active licenses and registrations globally, puts Robinhood in direct competition with industry giants such as Binance and Coinbase (NASDAQ:COIN).

Bitstamp's core spot exchange, popular in Europe and Asia, has over 85 tradable assets, and the deal is expected to power the growth of Robinhood Crypto.

"We are in our early days in the EU and we are excited to keep expanding there and beyond. The acquisition of Bitstamp will accelerate our global expansion," Johann Kerbrat, vice president and general manager of Robinhood Crypto, told Reuters.

The deal, expected to close in the first half of 2025, comes at a time when Robinhood's crypto business is seeing rapid growth but also facing regulatory hurdles in the United States.

Kerbrat said the company intends to keep communicating with regulators as it moves forward.

Robinhood's crypto business was the driving force behind a massive first-quarter earnings beat in May, but that same week, it also disclosed that it received a so-called Wells notice from the U.S. Securities and Exchange Commission over tokens traded on its platform.

The notice is issued when the regulator plans to bring enforcement action against a company.

The markets regulator has argued that crypto tokens should be considered securities and subject to its registration rules. Crypto firms, on the other hand, have accused the SEC of overreach.

© Reuters. The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021.  REUTERS/Andrew Kelly

Robinhood's stock has surged 69% this year after saying it plans to focus on "profitable growth". Analysts expect it is primed for more gains amid a resurgence of retail trading and increasing crypto adoption.

Barclays Capital and Galaxy Digital were the exclusive financial advisers to Robinhood and Bitstamp, respectively.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.