Stock-trading app Robinhood is diving deeper into the cryptocurrency realm with the acquisition of crypto exchange Bitstamp.
Robinhood on Thursday said it expects the final transaction value to be around $200 million, and the deal to close in the first half of 2025.
Robinhood is known for its stock-trading services, allowing ordinary consumers to invest in some of the world’s largest publicly-traded companies, but it has been moving further into crypto territory over the years. The company has added support for many of the most popular cryptocurrencies, including Bitcoin, though it restricted some of the crypto it supports last year due to regulatory scrutiny in the U.S.
More crypto and global expansion
Today’s deal not only signals California-based Robinhood’s continued push into crypto, but also its international expansion efforts. The company launched its core stock-trading product in the U.K. last November, and started offering crypto trading in the European Union (EU) shortly afterwards.
Founded in Europe in 2011, Bitstamp is among the world’s oldest cryptocurrency exchanges, allowing companies and individuals to trade all manner of cryptocurrency. It was acquired by a Belgian investment company called NXMH in 2018 and last year, Ripple bought a stake, too.
Robinhood went public in mid-2021, and as with many firms that fared well during the pandemic, the company saw its initial good fortunes crumble as the world (and investor sentiment) returned to normality. The company’s IPO valuation of $32 billion surged to more than $40 billion at one point, before steadily declining well below the $10 billion mark for much of the past two years.
However, the trading app has seen its valuation more than double in the past year to $19 billion, buoyed by record earnings. In its Q1 2024 report in May, Robinhood said its monthly active users had increased 16% year-on-year to 13.7 million, while its revenues rose 40% to $618 million. Notably, the company said its transaction-based revenue had risen by 59% to $329 million, primarily driven by a 232% increase in cryptocurrency income, which came to $126 million.
With Bitstamp under its wing, Robinhood says it will be better positioned to target retail and institutional crypto investors across Europe, Asia and the U.S. Bitstamp currently holds more than 50 licenses and registrations to operate in these markets.
“The acquisition of Bitstamp is a major step in growing our crypto business,” Robinhood’s crypto general manager, Johann Kerbrat, said in a statement. “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.”