On June 6, according to official news, Robinhood announced that it would acquire the global cryptocurrency trading platform Bitstamp. Affected by this, Robinhood’s stock price rose 2.27% before the market opened.
Johann Kerbrat, head of crypto at Robinhood, expressed his views on the acquisition of Bitstamp, saying that the acquisition of Bitstamp is an important step for Robinhood to develop its cryptocurrency business. The acquisition is aimed at better expanding its business outside the United States and welcoming institutional customers to Robinhood.
13 years of hard work, $200 million at the end
For this acquisition, Robinhood expects the final transaction price to be approximately $200 million in cash, subject to customary adjustments to the purchase price. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to be completed in the first half of 2025. Barclays Capital Inc. served as exclusive financial advisor to Robinhood, while Galaxy Digital Partners LLC served as exclusive financial advisor to Bitstamp.
As early as May last year, Ripple said it had acquired a small stake in cryptocurrency trading platform Bitstamp from Pantera Capital in the first quarter, but did not disclose the specific shares. Galaxy Digital provided advisory services for the transaction.
The veteran exchange was founded in 2011 and has offices in Luxembourg, the United Kingdom, Slovenia, Singapore, and the United States. As of last year, Bitstamp was the world’s 15th-largest spot cryptocurrency trading platform by trading volume, according to The Block’s data dashboard.
It is worth mentioning that Bitstamp was once compared with Coinbase with compliance as its main label. After France, Spain and Italy, Bitstamp became one of the only two cryptocurrency-related companies approved by the UK Financial Conduct Authority (FCA) in June last year. Not only that, even Ethereum founder Vitalik Buterin has transferred ETH to Bitstamp many times.
However, in recent years, Bitstamp has been unable to withstand regulatory pressure and has gradually faded from the public eye. In fact, since last year, Bitstamp has been shrinking its business in North America, reducing and banning related businesses in the United States and Canada. In mid-October, Bitstamp's US CEO and global chief business officer Bobby Zagotta also urged customers to withdraw funds before January 2024 in a statement.
Related reading: Bitstamp announces withdrawal from Canadian market next year, or prepares to shift focus to Europe
Not only has the external market shrunk, but Bitstamp is also facing a talent loss crisis. Following the departure of former CEO Julian Sawyer in 2020, a large number of project consultants also chose to leave Bitstamp in March last year. According to DLNews, the number of Bitstamp employees has dropped from about 650 to 450, a decrease of about 30%.
Now, this 13-year-old exchange will finally be acquired for $200 million. Bitstamp CEO JB Graftieaux emphasized that Bitstamp’s platform and expertise will be brought into Robinhood’s ecosystem and will bring users a better trading experience while continuing to be committed to compliance, security, and customer-centricity.
Will Robinhood bring more possibilities to the cryptocurrency world?
Robinhood’s popularity can be said to come from the myth of “retail investors vs. Wall Street”, which also brought Robinhood into contact with cryptocurrencies and provided early liquidity to the meme originator DOGE.
Since then, Robinhood has been involved in the crypto field many times, and its cryptocurrency business has always been the company's core growth driver. According to its official data, at the end of last year, the number of cryptocurrency trading users on the platform increased, and cryptocurrency trading revenue in the fourth quarter increased by 10% year-on-year to US$43 million. In the first quarter of this year, the nominal cryptocurrency trading volume increased by 224% year-on-year to US$36 billion.
Not only that, Robinhood also cooperates with major leading projects in the industry. On May 4, Uniswap Labs announced its cooperation with Robinhood, and then the Uniswap mobile app added support for transfers from Coinbase and Robinhood. On June 5, Robinhood Crypto EU announced on the social platform that it has launched TON in some EU jurisdictions, which is the third cryptocurrency after BONK and USDC.
On May 30, Robinhood announced the release of its crypto trading application programming interface (API) to US users. It is reported that the API allows US traders to set up automatic trading strategies. Now, Robinhood has acquired Bitstamp, and this strategic combination will enable Robinhood to better expand outside the United States.
In addition, Bitstamp has more than 50 active licenses and registrations around the world, and its core spot exchange offers more than 85 tradable assets, as well as products such as staking and lending, which will enhance Robinhood's cryptocurrency products.
Previously, Robinhood launched WIF, which helped the latter break through $1, becoming the first Dogecoin to break through $1. After the acquisition is successful, it may bring more platform users and encrypted funds to Robinhood, and the meme coins on Robinhood may also be connected to Bitstamp, continuing the "benefit myth" of DOGE and WIF.