Robinhood's acquisition of Bitstamp, one of the oldest crypto exchanges, is a strategic move aimed at expanding its crypto business and positioning itself against rivals such as Coinbase and Kraken, according to a report by research firm Bernstein.
The report states that Robinhood, which offers 15 cryptocurrencies to individual investors in the US and more than 30 tokens in Europe, will benefit from Bitstamp's listing of more than 85 tokens. This acquisition allows Robinhood to offer markets for a significantly larger number of tokens.
However, it is not known how some altcoins, which are uncertain whether they are securities in the USA, will be treated by Robinhood.
“With a full exchange, Robinhood would gain access to global liquidity and thus be able to potentially improve its economics by offering liquidity to its brokerage platform,” analysts Gautam Chhugani and Mahika Sapra wrote.
Crypto exchanges offer a wide range of services such as staking, stablecoin, trading, custody and prime brokerage. Acquiring Bitstamp could allow Robinhood to offer a broader range of crypto products to a more institutional customer base.
Broker JMP also commented on the acquisition, saying it would “increase opportunities for Robinhood to expand its participation in the evolving crypto value chain.”
*This is not investment advice.
