On June 6, according to official news, Robinhood announced that it would acquire Bitstamp, a global cryptocurrency trading platform. Affected by this, Robinhood's stock price rose 2.27% before the market

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

13 years of hard work, $200 million

For this acquisition, Robinhood expects the final transaction price to be approximately $200 million in cash, but the acquisition price needs to be adjusted according to customary conditions. The acquisition is subject to customary closing conditions, including regulatory approval, and is expected to be completed in the first half of 2025. Barclays Capital Inc. served as exclusive financial advisor to Robinhood, while Galaxy Digital Partners LLC served as exclusive financial advisor to Bitstamp.

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

The veteran exchange was founded in 2011 and has offices in Luxembourg, the United Kingdom, Slovenia, Singapore and the United States. According to The Block's data dashboard, as of last year, Bitstamp was the world's 15th largest spot cryptocurrency trading platform by trading volume.

It is worth mentioning that Bitstamp was once compared with Coinbase with compliance as its main label. After France, Spain and Italy, last June, Bitstamp became one of the only two cryptocurrency-related companies approved by the UK Financial Conduct Authority (FCA). Not only that, even Ethereum founder Vitalik Buterin has transferred ETH to Bitstamp many times.

However, in recent years, Bitstamp has been unable to resist regulatory pressure and has gradually faded from the public eye. In fact, since last year, Bitstamp has been continuously shrinking its business in North America, reducing and banning related businesses in the United States and Canada. In mid-October, Bobby Zagotta, Bitstamp's US CEO and global chief business officer, also urged customers to withdraw funds before January 2024 in a statement.

Related reading: "Bitstamp announces its withdrawal from the Canadian market next year, or is preparing to shift its focus to Europe"

Not only has the external market shrunk, but Bitstamp is also facing a talent loss crisis. Following the departure of former CEO Julian Sawyer in 2020, a large number of project consultants also chose to leave Bitstamp in March last year. According to DLNews, the number of Bitstamp employees has dropped from about 650 to 450, a decrease of about 30%.

And now, this 13-year-old exchange will finally be acquired for $200 million. Bitstamp CEO JB Graftieaux emphasized that Bitstamp's platform and expertise will be brought into Robinhood's ecosystem and will bring users a better trading experience while continuing to be committed to compliance, security and customer-centricity.

Will Robinhood bring more possibilities to the currency circle?

Robinhood's popularity can be said to come from the myth of "retail investors vs. Wall Street", which also made Robinhood associated with cryptocurrency and provided early liquidity to the meme ancestor DOGE.

Since then, Robinhood has begun to dabble in the encryption field many times, and its cryptocurrency business has always been the company's core growth driver. According to its official data, at the end of last year, the number of users trading cryptocurrencies on the platform increased, and cryptocurrency trading revenue in the fourth quarter increased by 10% year-on-year to US$43 million. This year, the nominal trading volume of cryptocurrencies in the first quarter increased significantly by 224% year-on-year to US$36 billion.

Not only that, Robinhood also cooperates with major leading projects in the industry. On May 4, Uniswap Labs announced a partnership with Robinhood, and then the Uniswap mobile app added support for transfers from Coinbase and Robinhood. On June 5, Robinhood Crypto EU announced on the social platform that TON has been launched in some EU jurisdictions. This is the third cryptocurrency after BONK and USDC.

On May 30, Robinhood announced the release of its crypto trading application programming interface (API) to US users. It is reported that the API allows US traders to set up automatic trading strategies. Now that Robinhood has acquired Bitstamp, this strategic combination will enable Robinhood to better expand outside the United States.

In addition, Bitstamp has more than 50 valid licenses and registrations worldwide, and its core spot exchange offers more than 85 tradable assets, as well as products such as staking and lending, which will enhance Robinhood's cryptocurrency products.

Previously, Robinhood launched WIF, which allowed the latter to break through $1, becoming the first Dogecoin to break through $1. After the acquisition is successful, it may bring more platform users and encrypted funds to Robinhood, and the meme coins on Robinhood may also be connected to Bitstamp, continuing the "benefit myth" of DOGE and WIF.

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