Robinhood is expanding its presence in the cryptocurrency market with the acquisition of Bitstamp, a prominent crypto exchange.
The stock-trading app announced on Thursday that it anticipates the final transaction value to be around $200 million, with the deal expected to close in the first half of 2025.
Robinhood, widely recognized for its stock-trading services that enable everyday consumers to invest in major publicly traded companies, has been steadily increasing its involvement in the cryptocurrency sector. The company has integrated support for numerous popular cryptocurrencies, including Bitcoin, although it restricted some crypto options last year due to U.S. regulatory scrutiny.
Enhanced Crypto and Global Expansion
This acquisition signals Robinhood’s commitment to deepening its crypto offerings and expanding internationally. The California-based company launched its core stock-trading product in the U.K. last November and began offering crypto trading in the European Union shortly thereafter.
Founded in Europe in 2011, Bitstamp is one of the oldest cryptocurrency exchanges globally, facilitating cryptocurrency trading for both companies and individuals. It was acquired by Belgian investment firm NXMH in 2018, and Ripple purchased a stake in the company last year.
Robinhood went public in mid-2021, experiencing initial success during the pandemic before facing a decline as market conditions and investor sentiment normalized. Its IPO valuation of $32 billion briefly surged to over $40 billion before dropping below $10 billion for much of the past two years.
However, Robinhood’s valuation has more than doubled over the past year, reaching $19 billion, driven by record earnings. In its Q1 2024 report, Robinhood noted a 16% year-on-year increase in monthly active users to 13.7 million, with revenues rising 40% to $618 million. Transaction-based revenue saw a 59% increase to $329 million, largely due to a 232% rise in cryptocurrency income, totaling $126 million.
With Bitstamp’s acquisition, Robinhood aims to enhance its appeal to both retail and institutional crypto investors across Europe, Asia, and the U.S. Bitstamp currently holds over 50 licenses and registrations to operate in these markets.
“The acquisition of Bitstamp is a major step in growing our crypto business,” said Johann Kerbrat, Robinhood’s crypto general manager. “The Bitstamp team has established one of the strongest reputations among retail and institutional crypto investors. Through this strategic combination, we are better positioned to expand our footprint outside of the U.S. and welcome institutional customers to Robinhood.”
