Robinhood Markets, Inc. (NASDAQ: HOOD), the popular stock trading platform, has struck a deal to acquire Bitstamp, a European cryptocurrency exchange. Robinhood will pay $200mn in cash for Bitstamp, doubling down on the cryptocurrency market despite increased regulatory scrutiny.

Bitstamp was founded in 2011 by two entrepreneurs, Nejc Kodric and Damian Merlak. The Luxembourg-based exchange has raised over $20 million in venture funding (Pitchbook data). A $200mn deal likely represents a healthy exit for its investors and founders.

Robinhood is best known as a stock trading app favored by retail investors, but it also has a booming crypto trading business. Its crypto trading volume in this year’s first quarter was $36bn, a 224% year-on-year increase.

Acquiring Bitstamp signals Robinhood’s increasing commitment to the crypto markets even as U.S. regulators have clamped down on the industry. This May, the company disclosed to investors that the U.S. Securities and Exchange Commission (SEC) is investigating it for securities violations and could file a lawsuit soon. The potential lawsuit relates to Robinhood’s cryptocurrency listings, which the SEC considers unregistered securities.

Any attempt by Robinhood to increase its crypto trading services in the U.S. could invite further scrutiny, so the company is rationally looking to expand in Europe. Bitstamp has over 85 tradable digital tokens, compared to a dozen on Robinhood. The acquisition could propel Robinhood’s crypto business to higher heights.

• Robinhood debuted on the public markets in 2021, raising nearly $2bn at a $32bn valuation. Its stock has underperformed since then, with a current market value of $20bn. This May, Robinhood unveiled a $1bn stock buyback to appease investors, causing a slight bump in its market value.

• Barring regulatory hurdles, the Bitstamp deal is expected to close in the first half of 2025.

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