Bitstamp was acquired by Robinhood, and the crypto market may welcome new users?

Author: Luccy, BlockBeats

On June 6, according to official news, Robinhood announced the acquisition of the global cryptocurrency exchange platform Bitstamp. As a result, Robinhood's stock price rose 2.27% in pre-market trading.

Johann Kerbrat, Robinhood's head of crypto, expressed his views on the acquisition of Bitstamp, stating that acquiring Bitstamp is an important step for Robinhood's cryptocurrency business development. The acquisition aims to better expand its business outside the United States and welcome institutional clients to join Robinhood.

13 Years of Efforts, Ending with $200 Million

Regarding this acquisition, Robinhood expects the final transaction price to be approximately $200 million in cash, but the acquisition price will need to be adjusted according to customary practices. The acquisition must meet customary closing conditions, including obtaining regulatory approval, and is expected to be completed in the first half of 2025. Barclays Capital Inc. is serving as Robinhood's exclusive financial advisor, while Galaxy Digital Partners LLC is acting as Bitstamp's exclusive financial advisor.

As early as last May, Ripple had stated that it had acquired a small stake in the cryptocurrency exchange Bitstamp from Pantera Capital in the first quarter, but did not disclose the specific shares. Galaxy Digital provided advisory services for this transaction.

This established exchange was founded in 2011 and has offices in Luxembourg, the UK, Slovenia, Singapore, and the United States. According to The Block's data dashboard, Bitstamp was the fifteenth largest spot cryptocurrency exchange in the world by trading volume as of last year.

It is worth mentioning that Bitstamp has been compared to Coinbase with compliance as its main label. After being approved by the Financial Conduct Authority (FCA) in the UK, Bitstamp became one of only two cryptocurrency-related companies approved by the FCA last June, following approvals in France, Spain, and Italy. Moreover, even Ethereum founder Vitalik Buterin has transferred ETH to Bitstamp multiple times.

However, in recent years, Bitstamp has struggled against regulatory pressure and gradually faded from public view. In fact, since last year, Bitstamp has been continuously shrinking its business in North America, reducing and prohibiting related operations in the United States and Canada. In mid-October, Bobby Zagotta, CEO of Bitstamp USA and Global Chief Business Officer, urged customers to withdraw funds before January 2024 in a statement.

Not only has Bitstamp shrunk its external market, but it is also facing a talent drain internally. Following the departure of former CEO Julian Sawyer in 2020, a large number of project advisors also chose to leave Bitstamp last March. According to DLNews, the number of Bitstamp employees has decreased from about 650 to 450, a reduction of approximately 30%.

Now, this established exchange, which has been around for 13 years, will ultimately be acquired for $200 million. JB Graftieaux, CEO of Bitstamp, emphasized that Bitstamp's platform and expertise will be integrated into Robinhood's ecosystem, providing users with a better trading experience while continuing to focus on compliance, security, and customer-centricity.

Will Robinhood Bring More Possibilities to the Crypto Space?

Robinhood's rise can be attributed to the myth of "retail investors battling Wall Street," which has connected Robinhood with cryptocurrencies, providing early liquidity to the meme pioneer DOGE.

Since then, Robinhood has repeatedly ventured into the crypto space, and its cryptocurrency business has always been a core growth driver for the company. According to its official data, by the end of last year, the increase in cryptocurrency trading users on the platform led to a 10% year-on-year growth in cryptocurrency trading revenue in the fourth quarter, reaching $43 million. By this year, the nominal trading volume of cryptocurrencies in the first quarter saw a significant year-on-year increase of 224%, reaching $36 billion.

Moreover, Robinhood has collaborated with major projects in the industry. On May 4, Uniswap Labs announced a partnership with Robinhood, and subsequently, the Uniswap mobile app added support for transfers from Coinbase and Robinhood. On June 5, Robinhood Crypto EU announced on social media that it had launched TON in certain EU jurisdictions, marking the third cryptocurrency after BONK and USDC.

On May 30, Robinhood announced the release of its cryptocurrency trading application programming interface (API) for U.S. users. It is reported that this API allows U.S. traders to set up automated trading strategies. Now, with Robinhood's acquisition of Bitstamp, this strategic combination will enable Robinhood to better expand outside the United States.

Additionally, Bitstamp holds over 50 valid licenses and registrations globally, and its core spot exchange offers more than 85 tradable assets, as well as products like staking and lending, which will enhance Robinhood's cryptocurrency offerings.

Previously, Robinhood's listing of WIF helped it surge past $1, becoming the first dogecoin to break the $1 mark. After the acquisition is successful, it may bring more platform users and crypto funds to Robinhood, and meme coins on Robinhood may also be integrated with Bitstamp, continuing the "beneficial myth" of DOGE and WIF.