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The latest acquisition is part of Robinhood’s strategy to expand its product offering into crypto and mature into a full-fledged financial service provider.
On Thursday, June 6, the popular trading platform Robinhood announced that it would buy crypto exchange Bitstamp in a $200 million cash deal. This comes as part of Robinhood’s plan to speed up the broader push into the digital assets market, in its biggest deal ever.
In its decade-long journey, Robinhood has been very popular among retail investors for its zero-fee commission and is looking to expand into other product offerings thereby maturing into a full-fledged financial service provider while catering to new-age investors.
The acquisition of Bitstamp, founded in 2011 and holding 50 active licenses and registrations worldwide, positions Robinhood in direct competition with industry giants like Binance and Coinbase. Furthermore, the Bitstamp acquisition will also help power the growth of Robinhood Crypto thereby stepping into the institutional business.
Bitstamp’s core spot exchange, popular in Asia and Europe, offers a total of 85 tradable assets while including products like lending and staking. Speaking to Reuters, Johann Kerbrat, Vice President and General Manager of Robinhood Crypto, said:
“We are in our early days in the EU and we are excited to keep expanding there and beyond. The acquisition of Bitstamp will accelerate our global expansion”.
Robinhood to Complete Bitstamp Acquisition by 2025
As per the report, Robinhood will complete the acquisition of Bitstamp by 2025. Interestingly, the deal comes at a time when Roboinhood is standing at the crossroads of rapid growth and regulatory hurdles in the United States. Kerbrat stated that Robinhood will keep communicating with the regulators while moving forward.
Robinhood’s crypto business was the driving force behind its impressive first-quarter earnings beat in May. However, during the same week, the company disclosed that it had received a ‘Wells’ notice from the US Securities and Exchange Commission, indicating potential upcoming enforcement action.
The US Securities and Exchange Commission has been arguing for a long time that they should be treating cryptocurrencies as securities while being subject to registration rules. On the other hand, the crypto firms have accused the SEC of overreach.
This year, the price of the Robinhood stock has surged by a staggering 69% as the company vowed to chase profitable growth. Analysts anticipate further gains due to a resurgence in retail trading and growing crypto adoption.
