Capital markets News

Robinhood to acquire international crypto exchange Bitstamp for $200m


Stock trading app Robinhood announced its acquisition of Luxembourg-based cryptocurrency exchange Bitstamp in a deal designed to expand its global reach. Bitstamp has offices in the UK, Slovenia, Singapore, and the US and customers in the EU, UK, US and Asia. The transaction is expected to be worth around $200 million and will close in the first half of 2025, subject to regulatory approvals.

Bitstamp was founded in 2011 and acquired by Belgian investment firm NXMH in 2018. Earlier this year, Ripple acquired a minority stake.

“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,” said Johann Kerbrat, General Manager of Robinhood Crypto. “Through this strategic combination, we are better positioned to expand our footprint outside of the US and welcome institutional customers to Robinhood.”

Bitstamp has various institutional offerings, including trading and a white label solution. Hence, this will be Robinhood’s first experience outside of retail. For example, when Societe Generale wanted to list its EURCV institutional stablecoin on a crypto exchange, it chose Bitstamp.

Barclays Capital advised Robinhood on the transaction, and Galaxy Digital advised Bitstamp.

Sam Bankman-Fried, the jailed founder of FTX, bought a 7.6% stake in Robinhood and had ambitions to create a powerhouse that combined crypto and securities. But it looks like Robinhood wants to do that itself. It eventually paid $606 million to buy back the stock.

Crypto is already a major source of revenue

Robinhood’s foray into cryptocurrency activities has proven to be a lucrative venture, contributing significantly to its revenues. That’s why it’s forging ahead despite receiving a Wells Notice from the SEC warning of impending legal action.

In the first quarter of 2024, it generated $126 million in crypto revenues, accounting for 38% of its total $329 million top line. While Robinhood is primarily known as a stock trading app, the stock trading sector brought in just $39 million in revenues during the same period, with the largest portion of its income coming from options, bringing in $154 million.

Image Copyright: Primakov / Deposit Photos