The Bitstamp acquisition expands Robinhood’s international attain, the report stated.
The funding financial institution stated the deal additionally will increase the buying and selling platform’s institutional publicity.
Architect Companions stated the worth paid for the acquisition was cheap.
Crypto is turning into an more and more vital a part of Robinhood’s (HOOD) enterprise and, regardless of receiving a Wells Discover from the U.S. Securities and Trade Fee (SEC) final month, the buying and selling platform continues to broaden its digital belongings enterprise, funding financial institution Architect Companions stated in a Friday report.
The growth is evidenced by the current settlement to purchase crypto change Bitstamp, the financial institution stated. Architect notes that crypto accounted for 20% of Robinhood’s complete income in first-quarter 2024.
“This acquisition immediately expands international attain to make sure participation no matter U.S. actions,” the report stated.
A Wells Discover is a preliminary warning from the SEC informing an organization that the regulator has sufficient info to carry a possible enforcement motion in opposition to it. Robinhood acquired a Wells Discover from the SEC on Could 4 on account of its itemizing of crypto tokens that the regulator probably views as unlicensed securities.
The Bitstamp acquisition may also broaden Robinhood’s institutional providing, which positions the buying and selling platform as one of many “few publicly traded crypto-influenced firms that may be capable to serve establishments as they arrive into the digital asset house,” the observe stated.
Bitstamp is a “prime asset on account of its lengthy operation historical past and international licensing attain,” Architect stated, including that Robinhood acquired the crypto change at an inexpensive value.
Architect notes that the worth paid by Robinhood of $200 million in money is a big low cost to the $500 million valuation that Bitstamp acquired within the 2018 majority funding.
Learn extra: Robinhood’s Bitstamp Deal Is Strategic and Brings Added Institutional Publicity: Bernstein