Robinhood expands crypto products with Bitstamp acquisition

Robinhood is aiming for expansion in the European and Asian markets

Robinhood Markets Inc. has just bought Bitstamp Ltd., a cryptocurrency exchange, for $200m in cash to expand its cryptocurrency services. This deal is seen as being the largest the company has made so far within the sector. Furthermore, Robinhood is hoping to strengthen its position beyond the US by primarily targeting Europe and Asia.

Founded in 2011, Bitstamp is one of the oldest and most reliable cryptocurrency exchanges globally. The exchange has its headquarters situated in Luxembourg with offices also found in the UK, Slovenia and Singapore among others. Additionally, it holds over fifty licenses or registrations across different countries while serving retail as well as institutional clients.

There will be several benefits from Robinhood’s acquisition of Bitstamp including expansion of its customer base, improvement of the crypto product range offered by both companies. Additionally, Robinhood would add the provision of lending and staking services which Bitstamp currently offers.

Johann Kerbrat, general manager of Robinhood Crypto, commented:

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

JB Graftieaux, Bitstamp’s CEO, said that the company’s integration with Robinhood’s ecosystem will improve the experience of those who use it to trade, as well as ensure compliance, security and customer care.

This purchase is very timely considering the regulatory attention being given to Robinhood in the US. The Securities and Exchange Commission (SEC) recently sent a Wells notice to Robinhood indicating enforcement action might be taken against its crypto business. In spite of these issues, revenue from Robinhood’s cryptocurrency trading has experienced tremendous growth having tripled during Q1 2024 alone.

The agreement highlights Robinhood's desire for becoming an all-inclusive provider of financial services. This move would see the company extend its  operations beyond just being a commission free stock trading app.

Over the past few years, Robinhood has diversified its products with the launch of retirement accounts among others. It also added credit card services. The acquisition of Bitstamp will enable Robinhood to compete better against giants like Binance or Coinbase.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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