On June 6th, according to official sources, Robinhood announced its acquisition of the global cryptocurrency trading platform Bitstamp. As a result, Robinhood’s stock price rose by 2.27% in pre-market trading.
Johann Kerbrat, the head of cryptocurrency at Robinhood, expressed his views on the acquisition of Bitstamp, stating that it is an important step for Robinhood in developing its cryptocurrency business. The acquisition aims to expand business operations outside of the United States and welcome institutional clients to join Robinhood.
After 13 years of hard work, the deal is expected to be finalized with a cash payment of approximately $200 million, subject to customary adjustments. The acquisition is subject to customary closing conditions, including regulatory approval, and is expected to be completed in the first half of 2025. Barclays Capital Inc. is serving as Robinhood’s exclusive financial advisor, while Galaxy Digital Partners LLC is serving as Bitstamp’s exclusive financial advisor.
As early as May of last year, Ripple announced that it had acquired a minority stake in the cryptocurrency trading platform Bitstamp from Pantera Capital in the first quarter, without disclosing specific ownership. Galaxy Digital provided advisory services for this transaction.
Founded in 2011, Bitstamp has offices in Luxembourg, the UK, Slovenia, Singapore, and the United States. According to data from The Block, based on trading volume, Bitstamp was the fifteenth largest spot cryptocurrency trading platform globally as of last year.
Bitstamp had been known for its compliance standards and was compared to Coinbase. After being approved by the Financial Conduct Authority (FCA) in France, Spain, and Italy, Bitstamp became one of the only two cryptocurrency-related companies approved by the FCA in the UK in June last year. Even Ethereum founder Vitalik Buterin has transferred ETH to Bitstamp multiple times.
However, in recent years, Bitstamp has struggled under regulatory pressure and gradually faded from the public eye. In fact, since last year, Bitstamp has been scaling back its operations in North America, reducing and prohibiting operations in the United States and Canada. In mid-October, Bobby Zagotta, Bitstamp’s US CEO and Global Chief Business Officer, urged customers to withdraw funds by January 2024 in a statement.
Not only has Bitstamp contracted its external markets, but it has also faced a talent exodus internally. Following the departure of former CEO Julian Sawyer in 2020, a large number of project advisors left Bitstamp in March last year. According to DLNews, Bitstamp’s staff decreased from around 650 to 450, a reduction of approximately 30%.
Now, after 13 years in operation, Bitstamp has been acquired for $200 million. JB Graftieaux, the CEO of Bitstamp, emphasized that Bitstamp’s platform and expertise will be integrated into Robinhood’s ecosystem, providing users with a better trading experience while continuing to focus on compliance, security, and customer-centricity.
Will Robinhood bring more possibilities to the cryptocurrency industry? Robinhood’s rise can be attributed to the myth of “retail investors battling Wall Street,” which also led to Robinhood’s foray into cryptocurrencies, providing early liquidity to meme originator DOGE.
Since then, Robinhood has made several forays into the cryptocurrency sector, with its cryptocurrency business being a key driver of growth for the company. According to official data, at the end of last year, the increase in cryptocurrency trading users on the platform led to a 10% year-on-year growth in cryptocurrency trading revenue in the fourth quarter, reaching $43 million. By the first quarter of this year, nominal cryptocurrency trading volume increased by 224% year-on-year, reaching $36 billion.
Furthermore, Robinhood has collaborated with leading projects in the industry. On May 4th, Uniswap Labs announced a partnership with Robinhood, with the Uniswap mobile app subsequently adding support for transfers from Coinbase and Robinhood. On June 5th, Robinhood Crypto EU announced on social media that TON had been launched in some EU jurisdictions, following BONK and USDC as the third cryptocurrency after the acquisition.
On May 30th, Robinhood announced the release of its cryptocurrency trading application programming interface (API) to US users. The API allows US traders to set automatic trading strategies. With the acquisition of Bitstamp, this strategic combination will enable Robinhood to expand more effectively beyond the United States.
Moreover, Bitstamp holds over 50 valid licenses and registrations globally, offering more than 85 tradable assets on its core spot exchange, as well as products such as staking and lending, enhancing Robinhood’s cryptocurrency offerings.
Previously, WIF’s listing on Robinhood caused its price to break $1, becoming the first meme coin to achieve this milestone. After a successful acquisition, Robinhood may attract more platform users and cryptocurrency funds, with meme coins on Robinhood potentially being integrated into Bitstamp, continuing the success story of DOGE and WIF.