Markets
Robinhood buys cryptocurrency exchange Bitstamp in surprise $200 million deal
Robinhood announced on Thursday that it has acquired Bitstamp, one of the world’s oldest cryptocurrency exchanges, in an all-cash deal estimated to be worth around $200 million. The acquisition, which is expected to close in the first half of 2025, will advance one of Robinhood’s strategic objectives by expanding the company’s presence in international markets.
Bitstamp has been a constant presence in the crypto industry since 2011, when it launched in Slovenia and later moved to Luxembourg and the United Kingdom. However, its market share has declined in recent years, and despite having four to five million customers, Bitstamp now ranks 16th in trading volume among cryptocurrency exchanges. Its biggest market remains Europe, but it also has customers in the UK, Asia and the USA.
In an interview with Fortune, Robinhood Crypto general manager Johann Kerbrat highlighted that Bitstamp has 50 active licenses around the world, and that the exchange also trades robustly with institutions. He added that the deal will be a significant first step toward another of Robinhood’s strategic priorities, which is developing an institutional business to complement its rapidly growing suite of consumer products.
The acquisition comes as a surprise given there were no reports that Bitstamp was for sale, and as Robinhood is recovering from a brutal 2023 that saw its share price, which currently trades around $22, fall to $7. The recession, which sparked rumors that Robinhood had become a takeover target, was part of a broader reckoning that cast doubt on the overall health of the financial technology sector.
In 2024, it’s been a very different story for Robinhood, as the company reported record first-quarter profits and last week announced $1 billion shares buy back. Meanwhile, it began to move away from the feast-or-famine business of stock trading, adding services such as credit cards and retirement accounts that are less prone to market fluctuations.
Robinhood’s acquisition of Bitstamp coincides with a huge rally in crypto markets that has seen the price of Bitcoin rise more than 60% since the start of the year, and the company posted a triple increase in crypto revenue during the first quarter.
The deal also has the potential to transform Robinhood’s current crypto operations, which primarily revolve around acquiring Bitcoin and other currencies from market makers. By acquiring Bitstamp, Robinhood will be able to source crypto from its own exchange and potentially invite its customers to trade there. Bitstamp also offers up to 85 digital tokens on some of its markets, compared to the dozen offered by Robinhood, as well as lending and to bet Services.
Any attempt by Robinhood to increase its crypto offerings in the US could face scrutiny from the Securities and Exchange Commission, which signaled in May that it plans to sue the company over its token offerings. The SEC’s move came as part of a broader attack on the crypto industry, but one that may be ongoing. shaky legal ground as both courts and elected officials accused the agency of overreach.
As for whether Bitstamp will remain an independent brand or be rebranded as a Robinhood product, Kerbrat said it’s premature to say, as the deal won’t close until next year.
The acquisition comes almost a year after reports that Bitstamp was in negotiations to raise funds to expand its operations in the UK and Asia. At the time, the company’s CEO, Jean-Baptiste Graftieaux, said the company did not intend to sell itself.
In Robinhood’s press release announcing the acquisition, Gratfieaux stated: “Bringing the Bitstamp platform and expertise into the Robinhood ecosystem will provide users with an enhanced trading experience with an ongoing commitment to compliance, security and customer-centricity.”
Barclays Capital acted as financial advisor to Robinhood for the deal, while Galaxy Digital Partners served as advisor to Bitstamp.