Markets
Robinhood buys cryptocurrency exchange Bitstamp in surprise $200 million deal
Robinhood announced Thursday that it has acquired Bitstamp, one of the world’s oldest cryptocurrency exchanges, in an all-cash deal expected to be worth about $200 million. The acquisition, which is expected to close in the first half of 2025, will advance one of Robinhood’s strategic goals by expanding the company’s presence in overseas markets.
Bitstamp has been a fixture in the cryptocurrency industry since 2011, when it launched in Slovenia, then moved to Luxembourg and the United Kingdom. Its market share has declined in recent years, however, and despite having four to five million customers, Bitstamp now ranks 16th in trading volume among cryptocurrency exchanges. Its largest market remains Europe, but it also has customers in the UK, Asia and the US
In an interview with Fortune, Robinhood Crypto CEO Johann Kerbrat pointed out that Bitstamp has 50 active licenses around the world and that the exchange also does solid trading with institutions. He added that the deal will represent a significant first step toward another of Robinhood’s strategic priorities, which is developing an institutional business to complement its rapidly growing range of consumer products.
The acquisition came as a surprise as there had been no reports that Bitstamp was for sale and as Robinhood is recovering from a brutal 2023 that saw its stock price, which currently trades around $22, drop to as low as $7. The downturn, which led to rumors that Robinhood had become a takeover target, was part of a larger calculus casting doubt on the overall health of the fin-tech sector.
In 2024, it was a very different story for Robinhood as the company reported record earnings for the first quarter and announced a $1 billion stock price last week. buy back. Meanwhile, it has begun to move away from the “feast-or-famine” business of stock trading, adding services such as credit cards and retirement accounts that are less subject to market fluctuations.
Robinhood’s acquisition of Bitstamp coincides with a huge recovery in cryptocurrency markets that has seen the price of Bitcoin rise more than 60% since the start of the year, and the company posted a triple increase in cryptocurrency revenue in the first quarter.
The deal also has the potential to transform Robinhood’s current crypto operations, which primarily revolve around sourcing Bitcoin and other currencies from market makers. By acquiring Bitstamp, Robinhood will instead be able to source cryptocurrencies from its exchange and potentially invite its customers to trade there. Bitstamp also offers as many as 85 digital tokens in some of its markets, compared to the dozen or so offered by Robinhood, as well as loans and episode Services.
Any attempt by Robinhood to increase its cryptocurrency offering in the United States could come under scrutiny from the Securities and Exchange Commission, which in May signaled plans to sue the company over its token offerings. The SEC’s move came as part of a broader attack on the cryptocurrency industry, but one that may be ongoing unstable legal basis as both courts and elected officials have accused the agency of overreaching.
As for whether Bitstamp will remain a standalone brand or be rebranded as a Robinhood product, Kerbrat said it’s premature to say since the deal won’t close until next year.
The acquisition comes nearly a year after the Bitstamp news broke in interviews raise funds to expand its operations in the UK and Asia. At the time, the company’s CEO, Jean-Baptiste Graftieaux, said the company had no intention of selling itself.
In Robinhood’s press release announcing the acquisition, Gratfieaux said: “Bringing Bitstamp’s platform and expertise to the Robinhood ecosystem will provide users with an enhanced trading experience with an ongoing commitment to compliance, security and customer centricity”.
Barclays Capital served as financial advisor to Robinhood on the deal, while Galaxy Digital Partners advised Bitstamp.