Bitcoin
Robinhood to acquire cryptocurrency exchange Bitstamp in $200 million deal
Popular stock trading app Robinhood is investing in digital currencies, advertising Thursday that it will acquire cryptocurrency exchange Bitstamp for around $200 million.
The deal marks the trading platform’s biggest push into the digital asset industry, the company said in a statement on Thursday, and will make it a competitor to major crypto trading firms such as Binance and Coinbase. The deal is expected to close in the first half of 2025.
The transaction comes as some of the country’s biggest financial companies introduce products aimed at everyday investors eager to put money into digital currencies.
“The acquisition of Bitstamp is an important step in growing our crypto business. Bitstamp’s long-standing, highly reliable global exchange has shown resilience through market cycles,” Robinhood Crypto General Manager Johann Kerbrat said in the statement. He added that the acquisition will allow Robinhood to increase its presence internationally and acquire institutional clients.
Robinhood is an online trading platform that promotes commission-free investing. It is the equivalent of an online broker, but it does not complete customer trades. Instead, it sends them to other trading companies, which match buyers with sellers of stocks and pay Robinhood a commission for the trades.
“Bringing the Bitstamp platform and experience into the Robinhood ecosystem will provide users with an enhanced trading experience with an ongoing commitment to compliance, security and customer-centricity,” Bitstamp CEO JB Graftieaux said in a statement.
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In fact, Robinhood’s recent profitability is tied to its fledgling crypto business. The company reported a profit of $157 million or 18 cents per share in the first quarter, beating analysts’ estimates. Its profits were driven in part by high crypto trading volumes.
“[C]Companies like Robinhood see that there is probably a lot more growth in all things crypto than just a traditional stock and options brokerage,” Omid Malekan, a professor at Columbia Business School who specializes in the crypto industry, told CBS MoneyWatch. It makes sense that they’re getting a trade that brings with it some different things that they don’t have today.”
After the Securities and Exchange Commission approved spot bitcoin exchange-traded funds, industry giants including BlackRock, Fidelity Investments and Franklin Templeton competed with other players to launch crypto ETFs. These investments allow buyers to gain exposure to bitcoin without directly owning it, among other benefits.
Malekan expects to see more traditional brokers entering the crypto space.
“If you combine this acquisition with the partnership of more traditional brokers with crypto exchanges and the success of bitcoin ETFs, then I think we can conclude that access to investing in crypto products will become much more widely available,” he said of Bitstamp. business. “And it will also be available through service providers or in formats that people are already familiar with. There are many potential investors who like to gain exposure to crypto assets through traditional service providers, and Robinhood is clearly planning to expand this.”
Christian Catalini, founder of the MIT Cryptoeconomics Lab, told CBS MoneyWatch that the deal “marks a new chapter for crypto.”
“Previously, major entities only dabbled in this, but now they are making significant bets on their future role in payments and financial services… This move is part of a broader trend of major fintech players becoming crypto players, and vice versa,” said Catalini.
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