Robinhood’s Bitstamp Deal Could Be What Catapults It Into Crypto’s Big Leagues
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Robinhood’s Bitstamp Deal Could Be What Catapults It Into Crypto’s Big Leagues
Robinhood Markets’ $200 million all-cash deal to buy Luxembourg-based cryptocurrency exchange Bitstamp underscores the trading platform’s ambition to push further into crypto, with the dual objective of attracting more institutional clients and trading a wider number of tokens in more markets globally.
But the acquisition’s overall significance and eventual impact could be far larger than what appears at first blush. After the deal closes, expected in the first half of 2025, it could mark the start of a chapter that catapults Robinhood into crypto’s big leagues and finally enables it to get out from underneath the at-times egregious operational missteps that have plagued the trading platform before and since going public in July 2021—even with a Wells notice from the U.S. Securities and Exchange Commission (SEC) currently hanging over its head.
While some analysts do not expect the acquisition to be materially accretive, Bitstamp will give Robinhood access to global liquidity that, in turn, will allow it to “offer the liquidity to its own broker platform, potentially improving its economics,” Bernstein analysts Gautam Chhugani and Mahika Sapra said in a research report.
Bitstamp is ranked 16th of the top 20 crypto spot exchanges globally—behind leaders Binance, Coinbase, OKX, Bybit and Upbit—by CoinMarketCap, which scores crypto exchanges based on traffic, trading volume, average liquidity and confidence in the legitimacy of reported trading volumes. (Statista ranks Bitstamp 80th out of 100 crypto exchanges globally based solely on 24-hour trading volume.)
At present, U.S. retail investors can buy and trade 15 crypto tokens on Robinhood, while European retail investors on the trading app have access to more than 30 tokens. Robinhood has the potential to significantly expand its crypto business with Bitstamp, which lists up to 85 coins and tokens, holds more than 50 active licenses and registrations, and has retail and institutional customers in the United Kingdom and Europe, the United States and Asia. Robinhood’s Johann Kerbrat, general manager of crypto, said the Bitstamp acquisition “was a big step forward in international expansion” for the trading platform in a recent CNBC Crypto World segment.