Acquisition of Bitstamp: Will Robinhood Bring More Opportunities to the Crypto World?

On June 6, according to official reports, Robinhood announced the acquisition of the global cryptocurrency trading platform Bitstamp. As a result, Robinhood’s pre-market stock price rose by 2.27%.

Robinhood’s head of crypto, Johann Kerbrat, stated that acquiring Bitstamp is an important step in expanding Robinhood’s cryptocurrency business. The acquisition aims to expand operations beyond the United States and welcome institutional clients to join Robinhood.

13 Years of Effort, Ending with a $200 Million Deal

For this acquisition, Robinhood expects the final transaction price to be approximately $200 million in cash, subject to customary purchase price adjustments. The acquisition is expected to be completed in the first half of 2025, pending regulatory approval and other customary closing conditions. Barclays Capital Inc. is serving as the exclusive financial advisor to Robinhood, while Galaxy Digital Partners LLC is acting as the exclusive financial advisor to Bitstamp.

As early as May last year, Ripple announced that it had acquired a minority stake in Bitstamp from Pantera Capital in the first quarter, though it did not disclose the specific shares. Galaxy Digital provided advisory services for this transaction.

Founded in 2011, this long-established exchange has offices in Luxembourg, the UK, Slovenia, Singapore, and the United States. According to The Block’s data dashboard, Bitstamp was the fifteenth-largest spot cryptocurrency exchange in the world by trading volume as of last year.

Notably, Bitstamp, known for its compliance, has often been compared to Coinbase. Last June, after gaining approval in France, Spain, and Italy, Bitstamp became one of only two crypto-related companies approved by the UK’s Financial Conduct Authority (FCA). Even Ethereum founder Vitalik Buterin has transferred ETH to Bitstamp multiple times.

However, in recent years, Bitstamp has struggled against regulatory pressure and gradually faded from public view. In fact, since last year, Bitstamp has been continuously shrinking its operations in North America, successively reducing and prohibiting related business in the US and Canada. In mid-October, Bitstamp US CEO and global Chief Commercial Officer Bobby Zagotta urged customers to withdraw funds before January 2024 in a statement.

The contraction isn’t just external. Internally, Bitstamp has faced a talent drain crisis. After former CEO Julian Sawyer left in 2020, a large number of project advisors also chose to leave in March last year. According to DLNews, Bitstamp’s employee count dropped from about 650 to 450, a reduction of around 30%.

Now, this 13-year-old exchange is set to be acquired for $200 million. Bitstamp CEO JB Graftieaux emphasized that Bitstamp’s platform and expertise will integrate into Robinhood’s ecosystem, bringing users a better trading experience while continuing to focus on compliance, security, and customer-centric services.

Will Robinhood Bring More Opportunities to the Crypto World?

Robinhood’s rise can be attributed to the “retail vs. Wall Street” phenomenon, which also connected Robinhood with cryptocurrencies, providing early liquidity to meme token DOGE.

Since then, Robinhood has repeatedly ventured into the crypto space, with its cryptocurrency business being a core growth driver 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-over-year increase in fourth-quarter cryptocurrency trading revenue, reaching $43 million. This year, in the first quarter, the nominal cryptocurrency trading volume saw a significant 224% year-over-year increase, reaching $36 billion.

Furthermore, Robinhood has collaborated with major projects in the industry. On May 4, Uniswap Labs announced a partnership with Robinhood, followed by Uniswap’s mobile app adding support for transfers from Coinbase and Robinhood. On June 5, Robinhood Crypto EU announced on social media that TON is now available in certain EU jurisdictions, following BONK and USDC.

On May 30, Robinhood announced the release of its cryptocurrency trading API for US users, allowing traders to set up automated trading strategies. Now, with the acquisition of Bitstamp, this strategic combination will enable Robinhood to better expand outside the United States.

Additionally, Bitstamp holds more than 50 effective licenses and registrations globally. Its core spot exchange offers over 85 tradable assets, as well as staking and lending products, which will enhance Robinhood’s cryptocurrency offerings.

Previously, Robinhood listed WIF, causing its price to surge past $1, making it the first meme coin to break the $1 barrier. With the successful acquisition, Robinhood may attract more platform users and crypto funds. The meme coins on Robinhood might also integrate with Bitstamp, continuing the success stories of DOGE and WIF.