Stock trading application Robin Hood dives deeper into the realm of cryptocurrencies by acquiring a cryptocurrency exchange Bitstamp.
Robin Hood on Thursday she said she was expecting the final transaction value will be approximately $200 million and the deal will close in the first half of 2025.
Robinhood is known for its stock trading services, which allow ordinary consumers to invest in some of the world’s largest publicly traded companies, but it has moved further into crypto territory over the years. The company has added support for many of the most popular cryptocurrencies, including Bitcoin, although it limited some of the cryptocurrencies it supports last year due to regulatory scrutiny in the US
More encryption and global expansion
Today’s deal not only signals California-based Robinhood’s continued push into crypto, but also its international expansion efforts. The company launched its main stock trading product in the UK last November and started offering crypto trading in the European Union (EU) shortly after.
Founded in Europe in 2011, Bitstamp is one of the oldest cryptocurrency exchanges in the world, allowing companies and individuals to trade cryptocurrencies of all kinds. It was acquired by a Belgian investment company called NXMH in 2018 and last year Ripple bought a stakevery.
Robinhood went public in mid-2021, and as with many companies that did well during the pandemic, the company saw its initial good fortune crumble as the world (and investor sentiment) returned to normal. The company’s IPO valuation 32 billion dollars it soared to more than $40 billion at one point, before falling steadily well below the $10 billion mark for much of the past two years.
However, the trading app has seen its valuation more than double in the past year to $19 billion, boosted by record profits. Inside 1st quarter 2024 report In May, Robinhood said its monthly active users rose 16% year over year to 13.7 million, while its revenue rose 40% to $618 million. Specifically, the company said its transaction-based revenue rose 59% to $329 million, largely due to a 232% increase in cryptocurrency revenue, which reached $126 million.
With Bitstamp under its wing, Robinhood says it will be better positioned to target retail and institutional crypto investors across Europe, Asia, and the US Bitstamp currently has more than 50 licenses and registrations to operate in these markets.
“The acquisition of Bitstamp is an important step in the growth of our crypto business,” said Robinhood’s general manager of crypto, Johann Kerbrat. “The Bitstamp team has built one of the strongest reputations among retail and institutional crypto investors. Through this strategic combination, we are better positioned to expand our footprint outside the US and welcome institutional clients to Robinhood.”
