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Robinhood to Acquire Cryptocurrency Exchange Bitstamp in $200 Million Deal
Popular stock trading app Robinhood is investing in digital currencies announcing It will acquire cryptocurrency exchange Bitstamp for around $200 million on Thursday.
The deal marks the trading platform’s biggest push yet into the digital assets sector, the company said in a statement Thursday, and will make it a competitor to larger cryptocurrency 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 largest financial firms introduce products aimed at ordinary investors eager to invest money in digital currencies.
“The acquisition of Bitstamp is an important step in the growth of our cryptocurrency business. Bitstamp’s long-standing and highly trusted global exchange has shown resilience through market cycles,” Robinhood Crypto CEO said in the statement , Johann Kerbrat. He added that the acquisition will allow Robinhood to expand 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 brokerage firm, but does not complete client trades. Instead, it sends them to other trading firms, which match buyers with sellers of stocks and pay Robinhood a commission on the trades.
“Bringing Bitstamp’s platform and expertise to the Robinhood ecosystem will provide users with an improved trading experience with an ongoing commitment to compliance, security and customer centricity,” Bitstamp CEO said in a statement , J.B. Graftieaux.
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In fact, Robinhood’s recent profitability has been tied to its nascent cryptocurrency business. The company reported profit of $157 million or 18 cents per share for the first quarter, beating analysts’ estimates. Its profits were driven in part by high cryptocurrency trading volumes.
“[C]companies like Robinhood see that there is probably a lot more growth in all things cryptocurrency than in traditional stock and options brokerage,” Columbia Business School professor Omid Malekan, a cryptocurrency industry expert, told CBS MoneyWatch. it makes sense that they’re getting an exchange 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 cryptocurrency ETFs. These investments allow buyers to gain exposure to bitcoin without directly owning it, among other benefits.
Malekan expects to see more traditional brokers enter the crypto space.
“If you combine this acquisition and the collaboration of more traditional brokers with cryptocurrency 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 . Deal. “And it will also become available through service providers or in formats that people are already familiar with. There are many potential investors who like to get 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 cryptocurrencies.”
“Previously, traditional entities simply dabbled, but now they are betting significantly on its future role in payments and financial services… This move is part of a broader trend that sees traditional fintech operators becoming operators of cryptocurrencies, and vice versa,” Catalini said.
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