FinTech News
Robinhood To Acquire Bitstamp for $200 Million
Robinhood is set to expand its crypto platform with its latest purchase.
About the acquisition:
Last week, Robinhood announced plans to acquire Bitstamp. The deal is valued at approximately $200 million, but is subject to customary adjustments. The all-cash transaction is expected to close in the first half of next year.
According to Robinhood, the acquisition will introduce its first institutional business as Bitstamp is “trusted by its institutional clients for reliable trade execution, deep order books and industry-leading API connectivity.” Among the services offered by Bitstamp are lending, staking, and more. Additionally, the platform features more than 85 tradable assets. In turn, Robinhood says that the deal will help to enhance its Robinhood Crypto business.
When the transaction is complete, Bitstamp’s team will join Robinhood. Meanwhile, the combined entity promises the same level of service, security, and reliability. Additionally, both companies say they are committed to transparency throughout the acquisition process.
What they’re saying:
Discussing how the purchase of Bitstamp will impact Robinhood, the GM of Robinhood Crypto Johann Kerbrat explained, “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. By seamlessly coupling customer experience with safety across geographies, the Bitstamp team has established one of the strongest reputations across retail and institutional crypto investors.” Johann continued “Through this strategic combination, we are better positioned to expand our footprint outside of the US and welcome institutional customers to Robinhood.”
Additionally, Bitstamp CEO JB Graftieaux said of the transaction, “As the world’s longest running cryptocurrency exchange, Bitstamp is known as one of the most-trusted and transparent crypto platforms worldwide. 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.”
My thoughts:
The crypto aspect of Robinhood’s business has been integral to growing their earnings. This announced acquisition shows that they’re not running away from the cryptocurrency market but instead doubling down on it. That said, just because the app mentions staking and lending as services Bitstamp features doesn’t mean such features will be coming to the United States. While Robinhood introduced staking to Europe last month, their recent response to the SEC notes that they’ve intentionally avoided such offerings here.
Given how volatile the crypto market and the regulatory climate around it can be, it will be interesting to see if and how this proposed deal changes ahead of its expected close within the next year.
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