Robinhood has set its sights on the cryptocurrency exchange Bitstamp, it emerged yesterday. The USD 200m deal, which is for cash, is part of Robinhood’s plans to expand its trading operations outside its core US market.
The Bitstamp deal is expected to close sometime in the first half of 2025. John Kerbrat, general manager of Robinhood’s cryptocurrency trading arm, emphasised that the deal would represent a major step in the growth of Robinhood’s international business.
Robinhood NASDAQGS:HOOD is still a relatively newcomer to the cryptocurrency trading world. It started offering crypto trading to clients in Europe in December 2023. Timing for this move into the European market was excellent, as it came on the back of returning positive sentiment in crypto ahead of SEC approval of spot BTC ETFs, and convergence in the EU on a workable cryptocurrency trading framework.
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Bitstamp is a real prize for Robinhood: it was founded in 2011 and is recognised as the oldest crypto exchange. It already enjoys a portfolio of regulatory registrations and licenses around the world. Bitstamp also has a massive network of retail clients, including in the UK and European Union.
Bitstamp deal still needs regulatory approval
Bear in mind that this deal still needs regulatory approval, so don’t reach for that champagne bottle just yet. Robinhood was issued a Wells notice from the SEC last month, which could be a prequel to SEC action. It could boil down to a debate between Robinhood and the US regulator on just where cryptocurrencies are securities and should be considered as such for regulatory purposes.
Robinhood CEO Vlad Tenev has previously said he is “disappointed” by the stance the SEC is taking, despite its recent approvals of crypto ETFs. “The SEC has the ability to change the rules to allow for brokers to accommodate crypto assets and they do not seem intent on doing that,” he said. “Rather they are proceeding with regulation by enforcement and that is disappointing.”
Bitstamp currently provides over 85 tradable assets, including staking and lending products. These should help Robinhood to expand and diversify its existing cryptocurrency trading offering. “Bringing Bitstamp’s platform and expertise into Robinhood’s ecosystem will give users an enhanced trading experience with a continuing commitment to compliance, security, and customer-centricity,” said JB Graftieaux, CEO of Bitstamp.
The deal raises the stakes for Coinbase, as it presents a larger and more aggressive competitor for Coinbase in the non-US crypto trading market.
We could see a much more innovative service for crypto traders from Robinhood in the wake of this deal. Robinhood had already been offering traders deals like a percentage of trading volume returned in BTC for users of its crypto app. New customers were being offered up to 1 BTC when they signed up for a Robinhood crypto account and traded at least EUR 10.
Currently Robinhood Crypto provides buy and sell support for over 25 cryptocurrencies. It is also the lowest average cost crypto trading platform in the EU.
