Monday, June 17, 2024

Robinhood to acquire Bitstamp crypto exchange in $200 million deal


Robinhood is putting its money on digital currencies, announcing Thursday that the popular stock trading app will acquire crypto exchange Bitstamp for about $200 million.

The deal marks the trading platform’s biggest-ever push into the digital assets industry, the company said in a statement Thursday, and will make it a competitor to larger crypto trading firms like Binance and Coinbase. The deal is expected to close in the first half of 2025.

The transaction comes as some of the country’s biggest financial companies introduce products aimed at ordinary investors eager to put money in digital currencies. 

“The acquisition of Bitstamp is a major step in growing our crypto business. Bitstamp’s highly trusted and long-standing global exchange has shown resilience through market cycles,” Robinhood Crypto general manager Johann Kerbrat said in the statement. He added that the acquisition will allow Robinhood to grow its footprint internationally and acquire institutional customers.

Robinhood is an online trading platform that promotes commission-free investing. It’s the equivalent of an online brokerage firm, but doesn’t complete client trades. Instead, it sends them to other trading firms, that match buyers with sellers of stocks and pay Robinhood a commission on the trades. 

The company’s acquisition of Bitstamp would introduce Robinhood’s first institutional business. 

“Bringing Bitstamp’s platform and expertise into Robinhood’s ecosystem will give users an enhanced trading experience with a continuing commitment to compliance, security and customer-centricity,” Bitstamp CEO JB Graftieaux said in a statement. 


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Indeed, Robinhood’s recent profitability has been tied to its fledgling crypto business. The company reported a profit of $157 million or 18 cents per share for the first quarter, beating analyst estimates. Its profits were driven in party by high crypto trading volumes. 

After the Securities and Exchange Commission approved spot bitcoin exchange-traded funds, industry giants including BlackRock, Fidelity Investments and Franklin Templeton raced other players to roll out crypto ETFs. These investments allow buyers to gain exposure to bitcoin without directly owning it, among other benefits.



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