Robinhood (HOOD) stock surged 6.5% on Thursday after the popular trading app announced plans to acquire cryptocurrency exchange Bitstamp. The price tag is about $200 million in cash. With this strategic move, Robinhood hopes to fast-track the expansion of its cryptocurrency offering, Robinhood Crypto, on a global scale. The acquisition of UK-based Bitstamp, which holds over 50 registrations and active licenses worldwide, will mark Robinhood's first foray into the institutional business realm. It should serve as a catalyst for Robinhood's rapidly growing crypto business, which has taken off in recent quarters, especially in several international markets where Bitstamp operates.

Who Is Bitstamp?

Founded in 2011, Bitstamp is the world’s longest-operating cryptocurrency exchange. It enables users to buy and sell fiat currency and cryptocurrencies. These include USD, EUR, GBP, Bitcoin, Ethereum, Stellar, Ripple, Algorand, Bitcoin Cash, and USD Coin. The company provides a comprehensive suite of services, including trade execution, lending, API connectivity, order books, and staking services, catering to institutional clients. Additionally, Bitstamp's core spot exchange offers over 85 tradable assets, along with lending and staking products for retail investors. Bitstamp has offices in Luxembourg, the UK, Slovenia, Singapore, and the U.S.

Will Robinhood Traders Be Happy With The Results?

So far, Robinhood investors seem to be pretty happy, since shares as of Monday mid-afternoon were up by about 5.39% at $23.37. This Bitstamp buy will expand Robinhood’s institutional offerings, positioning it as one of the few public crypto companies that can serve larger institutions as they begin to adopt digital assets. One looming question is the Securities and Exchange Commission (SEC). Accompanying this expansion is increasing regulatory scrutiny. Robinhood reports receiving a Wells Notice from the SEC, which indicates that they wrapped up an investigation that may lead to official action. The company expects the Bitstamp acquisition to be finalized in the first half of 2025—pending approval. As of now, analysts have HOOD as a consensus Buy.

Julie Stoller has no positions in Robinhood. Stocks.News has positions in Robinhood.