Fintech
Why Robinhood Plans to Buy Crypto Exchange Bitstamp
Robinhood plans to acquire European cryptocurrency exchange Bitstamp for $200 million, marking its largest takeover. CEO Vlad Tenev aims to accelerate international expansion, particularly in crypto. The deal, pending regulatory approval, is expected to close in the first half of next year. Robinhood’s stock rose 6%, driven by a Bitcoin ETF boom and ambitious growth plans.
The Californian neobroker Robinhood wants to take over the European cryptocurrency exchange Bitstamp for 200 million US dollars (about 184 million euros). The company announced this on Thursday. It is the largest takeover by Robinhood since the company was founded in 2013.
The agreement still needs to be approved by regulators. Robinhood expects the deal to close in the first half of next year.
With the takeover, “we are accelerating our plans for international expansion, especially in the crypto world,” said CEO Vlad Tenev on US stock exchange broadcaster CNBC. Part of Bitstamp is also a business unit with institutional investors, which is aimed at so-called market makers in crypto trading. These players bring buyers and sellers together and ensure that trading runs smoothly. Until now, Robinhood has focused primarily on US retail investors.
What Robinhood is planning
However, Tenev has been announcing ambitious growth plans for years. Robinhood is set to become a kind of super app through which customers can conduct a whole range of financial transactions, more than just trading stocks, options and cryptocurrencies. The company has already launched a commission-free trading app in the UK this year and offers a credit card in the US .
The stock was up six percent at the start of trading in New York. The stock is one of the big winners in 2024 and has gained 83 percent since the beginning of January.
The price was also driven by the boom in exchange-traded Bitcoin-Funds, so-called ETFs. These went on sale in the US in January and have triggered a new wave of euphoria in the broader crypto markets, which also drove up trading volumes on Robinhood.
Bitstamp is based in London and Luxembourg. The start-up, founded in 2011, has over 50 active licenses and registrations worldwide. This makes Robinhood a direct competitor to industry giants such as Binance and Coinbase. So far, Robinhood only allows its users to trade a relatively small number of digital currencies on its platform. However, users cannot transfer the coins from there to other platforms or accounts.
Tenev praised the clear framework for cryptocurrencies in Europe, which has been clarified by the so-called Mica regulation. “Unfortunately, Europe is ahead of the USA in this regard,” explained Tenev. In its home market, however, Robinhood is having trouble with the regulators: In May, the US Securities and Exchange Commission (SEC) warned that it could take legal action against Robinhood’s crypto trading platform.
The SEC suspects that Robinhood may have violated securities broker laws. Tenev’s company is not alone in this. SEC chief Gary Gensler, like US President Joe Biden and his Treasury Secretary Janet Yellen, is an outspoken critic of the crypto industry. The SEC has imposed a whole series of penalties and launched investigations in recent years, including against the largest American crypto exchange, Coinbase.
__
(Featured image by Erling Loken Andersen via Unsplash)
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Handelsblatt. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us
-
Crowdfunding1 week ago
D-Orbit Closed a 150 Million Series C Round, Supported by Private Investors
-
Crypto2 days ago
Bitcoin: Is “Uptober” Finally Starting for BTC after a Bad Start?
-
Impact Investing2 weeks ago
Steve’s Launches Campaign on Mamacrowd to Fund Development of Its Sustainable Footwear
-
Africa1 week ago
Botswana: Falling Diamond Production Impacts Economic Growth