Stock trading platform Robinhood is moving deeper into the cryptocurrency space with the acquisition of cryptocurrency exchange Bitstamp.
Robinhood said it expects the transaction to close in the first half of 2025 and that it expects the final transaction value to be around $200 million.
Robinhood is best known for its stock trading services, allowing consumers to invest in the world's largest publicly traded companies, but it has also expanded further into the cryptocurrency space by supporting many of the most popular cryptocurrencies, including Bitcoin, although it limited some of the cryptocurrencies it supports last year due to scrutiny from U.S. regulators.
More cryptocurrencies and global expansion
Today's announcement not only marks California-based Robinhood's continuing commitment to cryptocurrencies, but also the company's international expansion efforts, having launched its flagship stock trading product in the UK last November and cryptocurrency trading in the European Union shortly thereafter.
Founded in Europe in 2011, Bitstamp is one of the oldest cryptocurrency exchanges in the world, allowing businesses and individuals to trade all types of cryptocurrencies. It was acquired by Belgian investment firm NXMH in 2018, and Ripple acquired a stake in the company last year.
Robinhood went public in mid-2021, but like many companies during the pandemic, its initial momentum fizzled out as the world returned to normal. Its $32 billion valuation at the time of its IPO briefly soared to more than $40 billion before steadily declining to well below $10 billion for most of the past two years.
However, over the past year, the company's valuation has more than doubled to $19 billion, buoyed by record profits.In its first quarter 2024 report released in May, Robinhood announced that monthly active users increased 16% year over year to 13.7 million, and revenue increased 40% to $618 million. Notably, trade-based revenue notably increased 59% to $329 million, which the company said was primarily driven by cryptocurrency revenue, which increased 232% to $126 million.
Robinhood said the addition of Bitstamp would put it in a better position to target retail and institutional investors in Europe, Asia and the U.S. Bitstamp currently holds more than 50 licenses and registrations to operate in these markets.
“The acquisition of Bitstamp marks a major step in growing our crypto business,” Robinhood's general manager of crypto, Johan Kjellbladt, said in a statement. “The Bitstamp team has established a top-tier reputation among retail and institutional investors. This strategic combination will enable us to expand our reach outside the U.S. and better position us to welcome institutional investors to Robinhood.”