The Bitstamp acquisition is a strategic transfer by Robinhood to broaden its crypto enterprise, the report stated.
Bernstein stated that by buying an trade the buying and selling platform can supply markets in lots of extra tokens.
JMP stated it would not count on materials accretion from the deal.
Robinhood’s (HOOD) acquisition of Bitstamp is a strategic transfer by the buying and selling platform to broaden its crypto enterprise and positions the corporate nicely towards opponents resembling Coinbase (COIN) and Kraken, dealer Bernstein stated in a analysis report on Friday.
The dealer notes that Bitstamp, as one of many oldest exchanges that provides crypto, Robinhood has “stood the check of time over a number of cycles.”
Robinhood gives 15 cryptocurrencies to retail buyers within the U.S. and greater than 30 tokens in Europe, whereas Bitstamp lists over 85 tokens, the report stated. By buying an trade the buying and selling platform can supply markets in much more tokens.
“With a full trade, HOOD will get entry to international liquidity, and thus can supply the liquidity to its personal dealer platform, probably enhancing its economics,” analysts Gautam Chhugani and Mahika Sapra wrote.
Exchanges supply a variety of providers resembling staking, stablecoins, buying and selling, custody and prime broking, the word stated. The acquisition of Bitstamp probably permits Robinhood to supply a wider vary of crypto merchandise to a extra institutional shopper base. Bernstein has an outperform ranking on Robinhood inventory with a $30 worth goal. The shares have been little modified in early buying and selling on Friday at round $23.
Dealer JMP stated the acquisition of Bitstamp will “drive alternatives to broaden Robinhood’s participation within the evolving crypto worth chain,” in a report on Thursday. Proudly owning an trade will give Robinhood alternatives to attach extra deeply into the crypto ecosystem and will permit the platform to get extra concerned within the tokenization of property and securities, the report stated.
The acquisition will give Robinhood extra publicity to institutional purchasers and can speed up the corporate’s buildout in Europe, the report added.
As Bitstamp is marginally worthwhile at finest, JMP stated it doesn’t count on materials accretion from the deal. JMP has an outperform ranking on the inventory with a $30 worth goal.
Learn extra: Robinhood Delivers Huge Earnings Beat Pushed by Booming Crypto Buying and selling: Analysts