Robinhood doubles down on cryptography: Acquiring Bitstamp, a well-established compliance exchange, for US$200 million, and its stock price has soared by 90% this year

Founded in 2011, Bitstamp is considered one of the exchanges with higher compliance, with operations in Luxembourg, the United Kingdom, Slovenia, Singapore and the United States. It is not only one of the 4 crypto companies approved by the British FCA in the past year , also became the first European crypto exchange to receive in-principle approval in Singapore, and has also served as the "royal" exchange for Ethereum founder Vitalik Buterin many times. Now, Bitstamp is about to become the crypto sector of traditional securities trading software Robinhood.

Recently, perhaps due to the slowdown in crypto trading activities and regulatory pressure, Robinhood announced that it is acquiring the global crypto exchange Bitstamp for US$200 million to expand its international footprint. At the same time, the encryption business has become an important driver of Robinhood's performance growth, and its stock price has also jumped sharply this year.

Spending US$200 million to acquire Bitstamp, business expansion and regulatory pressure are important reasons

On June 6, Robinhood issued an announcement announcing that it would acquire Bitstamp. The transaction will be for US$200 million in cash. Proforma completion is expected to occur in the first half of 2025, subject to customary closing conditions and regulatory approvals. In this acquisition, Barclays Capital will serve as Robinhood’s exclusive financial advisor, and Galaxy Digital Partners will serve as Bitstamp’s exclusive financial advisor.

The announcement pointed out that this strategic cooperation will enable Robinhood to better expand beyond the United States and will bring trustworthy and reputable institutional business to Robinhood.

Regarding the reasons for the acquisition, Johann Kerbrat, general manager of Robinhood Crypto, said in a recent interview with Unchained that Robinhood hopes to expand the potential market with the acquisition of Bitstamp. This exchange has valid licenses in more than 50 countries or regions around the world. Registering will bring Robinhood customers from the European Union, the United Kingdom, the United States and even parts of Asia.

In this regard, "Fortune" magazine predicts that this transaction will not only add 4 million to 5 million new crypto customers to Robinhood. At the same time, Bernstein also pointed out in the research report that Robinhood’s acquisition of Bitstamp will enable Robinhood to provide a wider range of cryptocurrency products to more institutional customers. Expanding from the current 15 tokens in the U.S. and over 30 tokens in Europe to over 85 on Bitstamp will also give Robinhood access to global liquidity, improving the economics of its own platform. Bitstamp’s diverse services such as staking, stablecoins, trading, custody and prime brokerage will help Robinhood attract more institutional customers and potentially accelerate its expansion in the European market.

In addition, the U.S. regulatory environment is also an important reason for this acquisition. In May this year, Robinhood also received a Wells Notice from the U.S. SEC. “The lack of regulatory clarity in the U.S. is one of the main reasons we chose to expand into the EU market. After the SEC chairman publicly stated that crypto companies need to register, Robinhood has been trying to register and met with them 16 times. At the same time, for safety reasons, Robinhood only There are 15 assets listed on the platform and never provide staking services, but we still received the SEC’s Wells Notice. We are extremely disappointed with the SEC’s response,” Johann Kerbrat said frankly in the interview.

Investment bank Architect Partners believes that the SEC’s Wells Notice is a notification to Robinhood that regulators have sufficient information to potentially take enforcement action against it, and that the platform’s acquisition of Bitstamp will expand Robinhood’s global influence, thereby weakening it. The SEC's strong regulatory influence ensures Robinhood's participation no matter what actions the United States takes.

CoinGecko data shows that as of June 11, Bitstamp’s daily trading volume reached nearly 200 million US dollars, and its monthly visits reached 1.21 million times, ranking 41st among many exchanges. Although Bitstamp’s trading volume once ranked among the top three in the world, today the exchange’s market competitive advantage is no longer obvious. It is worth mentioning that Ripple also participated in the acquisition of part of Bitstamp's shares in 2023 to help the company expand its global influence and transcend the payment field. However, Bitstamp has also faced regulatory pressure from many countries. For example, it previously stopped providing token trading and ETH staking services to U.S. customers, terminated services in Canada, and was blocked by India's financial intelligence agency.

Intensify the expansion of encryption business, and the stock price has risen nearly 90% from the beginning of the year

Since this year, Robinhood is accelerating the pace of business expansion, including reaching cooperation with encryption projects, enriching encryption trading services and Asset type, etc.

For example, in January this year, Robinhood launched trading services for 11 spot Bitcoin ETFs, which are open to all customers in the United States in retirement accounts and brokerage accounts; in February, Robinhood’s wallet service Robinhood Connect integrated MetaMask. Allowing its users to use the latter's aggregation service to purchase cryptocurrencies; in March, Robinhood officially launched a crypto wallet for Android users, supporting the sending, receiving and storage of cryptocurrencies on Ethereum, Bitcoin, Dogecoin, Arbitrum and Polygon, etc. Features; In early May, Uniswap Labs announced a partnership with Robinhood, allowing users to purchase cryptocurrencies using debit cards, bank transfers, or directly from Robinhood balances. That same month, Robinhood Crypto launched staking functionality to European customers and launched a localized app. In addition, Robinhood also attracts investors by listing popular assets such as TON, WIF, and BONK.

這些舉措也帶動著Robinhood在今年第一季實現營收激增。根據Robinhood先前公佈的2024財年第一季財務業績數據顯示，其基於交易的營收年增59%，達到3.29億美元，主要是由加密貨幣收入的1.26億美元（增長232%）和期權收入的1.54億美元（成長16%）驅動的。而Robinhood Q1加密貨幣名目交易量較去年同期成長224%至360億美元，這一成長速度遠高於股票名目交易量的成長（40%），儘管後者的交易量更大，達到2,250億美元。

不過，隨著散戶對數位資產的興趣降溫，Robinhood的加密貨幣交易量也大幅下滑。根據其公佈的4月營運數據顯示，Robinhood的加密交易已較3月已下降了57%至101億美元，超過了競爭對手交易所的跌幅，但仍較去年同期增長173%，且股票交易平台日均營收交易量也下降了43%至約40萬筆。

而受惠於資產成長與交易量增加，Robinhood的股價也在今年大漲，華爾街投行JMP甚至將Robinhood的目標價上調至30美元，並重申其「市場表現優於大盤」評等。不過該機構也認為由於此次收購對象Bitstamp的獲利能力微乎其微，因此預計此交易不會帶來實質增值。截至發文，Robinhood的股價為23.43美元，較收購公告收盤價僅上漲了近2.1%，但較年初已漲了超89.3%。不久前，Robinhood還宣布其董事會批准了一項價值10億美元的股票回購計劃，預計將在今年第三季開始的兩到三年內執行該計劃。

整體來說，Robinhood正透過多項業務佈局加大在加密領域的影響力，但能夠借助Bitstamp為平台帶來更多用戶和資金量尚未可知。

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