Bitstamp Acquisition: Robinhood Gains Over 50 Global Crypto Licenses

Financial crypto services platform firm Robinhood (HOOD) has officially wrapped up its $200 million acquisition of crypto trading platform Bitstamp, founded in 2011 and based in Luxemburg. 

The all-cash deal, first announced last year, provides Robinhood with an immediate international presence, obtaining over 50 active crypto licenses across Europe, the UK, and Asia. 

How Robinhood Gains A New Competitive Edge

This acquisition not only enhances Robinhood’s regulatory standing but also grants access to an established institutional client base that the retail trading platform has previously lacked.

According to Johann Kerbrat, General Manager of Robinhood Crypto, the deal is more about synergy than a complete pivot. “We are one of the largest retail marketplaces in the US,” he noted, emphasizing that combining the strengths of both businesses will allow Robinhood to enter new markets without starting from scratch. 

Notably, the deal with Bitstamp brings features such as order books, crypto-as-a-service offerings, advanced APIs, and lending and staking options, which are crucial for institutional engagement.

Robinhood, which launched its crypto trading platform in 2018 and played a significant role in the meme-coin frenzy of 2021, has been working to rebrand itself as a serious contender in the evolving landscape of digital asset finance. 

Kerbrat pointed out that with increasing regulatory clarity from Congress, more institutions are likely to seek entry into the cryptocurrency space, and the Bitstamp acquisition provides the firm with a head start.

A Strategic Move Into Institutional Crypto Markets

Bitstamp is renowned for its deep liquidity and compliant reputation. The exchange has navigated multiple market cycles successfully and has built strong relationships with institutional partners across Europe and Asia—resources that Robinhood intends to leverage.

Kerbrat emphasized that Robinhood’s marketplace model, which does not involve matching orders, will benefit from Bitstamp’s product offerings, allowing the company to cater more effectively to active and advanced traders.

The acquisition also positions the firm advantageously in Europe, where cryptocurrency regulations are more clearly defined compared to the fragmented regulatory landscape in the US. 

For now, the firm plans to maintain Bitstamp’s existing interfaces and operations while exploring deeper integration in the future. Bitstamp is already functioning behind the scenes for smart order routing through Robinhood’s institutional platform, Robinhood Ledger.

As Robinhood continues to expand, including listing new tokens and launching staking services, the Bitstamp deal arrives at a crucial juncture. The regulatory track record and licensing portfolio of Bitstamp may provide Robinhood with a buffer as it ventures into new international markets.

Kerbrat has not ruled out the possibility of further acquisitions, stating, “If we can find a way to accelerate by at least 18 months or two years, and we have a lot of great reasons to believe this is a great acquisition, it’s something that we’ll definitely look at.”

Following the announcement of the acquisition, HOOD’s shares have closed the day on the rise, currently valued at $71.72. This represents a 5% increase within the last 24 hours.

Featured image from DALL-E, chart from TradingView.com