In a move signaling a major shift towards cryptocurrency, popular commission-free stock trading platform Robinhood announced its acquisition of Bitstamp, a leading global cryptocurrency exchange, for $200 million. This strategic acquisition marks Robinhood’s first foray into the crypto space beyond its existing limited offering and positions the company to become a major player in the ever-evolving digital asset market.
Known for their mobile app, which allows users to trade a variety of traditional assets commission-free and to buy and sell cryptocurrency, Robinhood has shaken up the financial industry by making investing more user-friendly and affordable. It looks to be positioning itself to continue that trend with Bitstamp.
Bitstamp is a European cryptocurrency exchange founded in 2011, making it one of the oldest and longest-running players in the crypto space. It offers a user-friendly platform for both beginners and more experienced traders and provides basic and advanced order types, catering to different trading strategies. Unlike some purely crypto-based exchanges, Bitstamp allows users to deposit and withdraw traditional currencies like USD, EUR, and GBP. This makes it easier for new users to enter the crypto market.
Perhaps most importantly to Robinhood right now, Bitstamp has a reputation for prioritizing security and regulatory compliance. A month prior, Robinhood Markets announced that they received a notice from the SEC regarding alleged securities violations related to custody of cryptocurrencies, cryptocurrency listings, and platform operations.
Of course, there are other benefits to the acquisition. Robinhood currently offers a limited selection of cryptocurrencies for trading. By acquiring Bitstamp, they gain a much larger and more established platform for cryptocurrency trading, allowing them to compete directly with other major crypto exchanges like Coinbase and Binance.
Expansion is another major driver. Bitstamp is a global exchange with a presence in Europe, Asia, and the US. This acquisition could help Robinhood expand its user base beyond the United States.
In a statement regarding the acquisition, Johann Kerbrat, general manager of Robinhood Crypto, provided: “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 U.S. and welcome institutional customers to Robinhood.”