Robinhood’s Bitstamp acquisition could open the door for institutional clients

Robinhood announced on Thursday that it plans to acquire Bitstamp for $200 million

article-image

Robinhood CEO Vlad Tenev | Permissionless I by Blockworks

share

Robinhood announced on Thursday that it entered into an agreement to acquire Bitstamp.

As part of the deal, Robinhood would pay $200 million in cash and it gets the bonus of an international expansion. The deal won’t close until the first half of 2025.

There are two aspects to look at when combing through this deal and what it means for the publicly traded Robinhood. 

While the announcement buoyed shares, which jumped on the news, analysts such as JMP’s Devin Ryan didn’t boost their price targets or weighting on the stock. 

Ryan’s team reiterated a $30 price target and its outperform rating on the stock. 

“We believe owning the exchange will provide opportunities for the firm to more deeply connect into the ecosystem (e.g., trading, staking, tokenization, payments, remittance, wallet integration), and perhaps over the longer term play an even bigger role in the tokenization of assets and securities, which we believe could be quite interesting. We also see opportunities to drive more activity and better economics with existing Robinhood retail customers through the exchange,” the analysts wrote. 

Robinhood rolled out Solana staking in the EU earlier this year after making its European Union debut just last December. In February, the firm teased that it plans to focus on building out that customer base.

Read more: Gensler takes aim at crypto exchanges

But Ryan’s team thinks that HOOD could open its doors to more institutional clients with the acquisition as well. According to CoinMarketCap, Bitstamp is ranked 16th on top crypto spot exchanges.

The company said it plans to onboard the Bitstamp team, and this means that it won’t have to pursue its own licenses in various jurisdictions. 

“Through this strategic combination, we are better positioned to expand our footprint outside of the US and welcome institutional customers to Robinhood,” said Johann Kerbrat, General Manager of Robinhood Crypto. 

But it’s going to take some time for these benefits to be realized financially. JMP wrote that it estimates revenues to be in the “ballpark of $100 [million]” and that’s based on “trailing 12-month volumes of $70 billion.”

Now there are other concerns, which we covered in the Empire newsletter Thursday morning. 

First is the potential lawsuit that Robinhood faces on US soil. 

In the last couple of months, the Securities and Exchange Commission served Robinhood, Uniswap and Consensys with Wells notices. Based on the Coinbase timeline from last year, if the SEC pursues a lawsuit against any of the three, we’re likely to see it filed this summer. 

Despite trying to fly under the radar, Robinhood couldn’t avoid the SEC’s ire. Last year, the company even delisted tokens after the regulatory agency listed them as securities in suits against Binance and Coinbase. 


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Graphics (5).jpg

Research

This month's PPGC mainly focused on discussing PIP-37: Ahmedabad Hard Fork, and the PIPs included with it. PIP-36, PIP-30 and PIP-35, included alongside PIP-37, were discussed also in the last PPGC notes. The only notable change since then has been the adoption of EIP-7702 over EIP-3074, with regard to PIP-22. Both are related to account abstraction, while EIP-7702 was proposed by Vitalik while EIP-7702 to eliminate vulnerabilities and ensure forward compatibility, by improving upon EIP-3074.

article-image

Plus, it’s time to finally address the Iggy Azalea in the room

article-image

There will be no altcoin season until we get ETFs for all the dog coins

article-image

Bitcoin miner is in discussions with other potential clients as it plans to use another 300 MW of capacity to support high-performance computing

article-image

Plus, Robinhood announced that it entered into an agreement to acquire Bitstamp, one of Europe’s largest and longest-serving crypto exchanges

article-image

Whether you decide to invest in bitcoin should be up to you, not the SEC or Gary Gensler

article-image

Plus, Sanctum’s upcoming airdrop for its new CLOUD token