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Robinhood has agreed to purchase European cryptocurrency change Bitstamp for $200mn, accelerating the US retail dealer’s growth outdoors its residence market and into digital belongings.
The Californian group stated on Thursday its buy of one of many world’s oldest cryptocurrency exchanges would additionally mark its first foray into focusing on institutional traders. Shares within the firm rose 5.4 per cent in early buying and selling to their highest stage since December 2021.
Robinhood is in search of to capitalise on a renewed wave of demand from traders for digital belongings as the worth of bitcoin trades near its document excessive.
In current months the dealer has sought to broaden its app from “meme shares”, the retail buying and selling surge that catapulted the corporate into the mainstream with strikes into credit cards.
It was on the centre of the share-trading mania of January 2021 that almost overwhelmed the corporate, requiring a capital injection from shareholders to shore up its funds.
Its transfer outdoors the US additionally comes throughout intense US regulatory scrutiny on the crypto trade, following the 2022 collapse of change FTX and the next 25-year jail sentence for its founder Sam Bankman-Fried earlier this 12 months.
The dealer warned final month that it was expecting a lawsuit from the Securities and Alternate Fee over its crypto enterprise, which gives commission-free buying and selling in 15 cryptocurrencies in most US states.
The SEC has filed a sequence of lawsuits in opposition to among the largest firms available in the market, together with Coinbase and Binance, and Consensys has additionally indicated it’s anticipating a swimsuit from the company.
The approval of spot bitcoin change traded funds earlier this 12 months has led to renewed optimism and curiosity within the trade, sending the worth of bitcoin to document highs of $73,000.
“The acquisition of Bitstamp is a serious step in rising our crypto enterprise,” stated Johann Kerbrat, common supervisor of Robinhood Crypto. “By this strategic mixture, we’re higher positioned to develop our footprint outdoors of the US and welcome institutional clients.”
Robinhood made 17 per cent of its transaction-based revenues from digital tokens final 12 months and has stepped up its crypto plans, providing buying and selling to clients within the EU from December.
Bitstamp was based in 2011 and is headquartered in Luxembourg. It’s the Sixteenth-biggest crypto change by buying and selling quantity, based on CoinMarketCap information, and permits retail and institutional merchants to purchase and promote cryptocurrencies, in addition to providing crypto lending and staking.
The change gained a UK registration final summer season from the Monetary Conduct Authority, and stated it had greater than 50 licenses and registrations globally.
Barclays Capital was the monetary adviser to Robinhood whereas Galaxy Digital Companions suggested Bitstamp.
