It might be time to forget about those stocks and options! Robinhood is making a major crypto move with a $200 million acquisition of Bitstamp. But that’s not all – they’re setting their sights on a whole new market: cryptocurrency futures, potentially expanding its offerings in both the U.S. and Europe.
Phew, this promises to be a game-changer for sure.
Here’s all you should know.
Robinhood plans to leverage Bitstamp’s licenses to offer perpetual futures in Europe. According to anonymous sources, the commission-free trading app also intends to launch CME-based futures in the U.S. for Bitcoin and Ether. Despite the importance of these plans, Robinhood is not in a rush to implement them immediately, according to one of their spokespersons.
Earlier this year, Robinhood acquired a futures broker license from Marex. Despite receiving a Wells notice from the SEC, indicating potential enforcement action, the company has continued to broaden its crypto strategy and offerings. This expansion comes on the heels of a strong earnings report in the first quarter, although the Wells notice highlights the ongoing regulatory scrutiny the company faces.
Robinhood’s entry into the derivatives market could intensify competition with established players like Coinbase Global Inc., which already offers derivative services. The global crypto derivative market significantly surpasses the spot market in volume, with recent reports indicating that while the spot market trading volume on centralized exchanges was $1.58 trillion, the monthly derivative volume reached $3.69 trillion.
The approval of the U.S. Bitcoin ETF has further increased the demand for futures, suggesting that Robinhood’s potential offerings could attract a new segment of crypto traders.
Despite the SEC’s Wells notice, Robinhood remains committed to finalizing the $200 million Bitstamp acquisition early next year. This strategic move underlines their ambition to enhance their market presence in both the U.S. and Europe through derivative offerings.
In summary, Robinhood’s acquisition of Bitstamp and its foray into the crypto futures market represent a bold expansion strategy, aiming to capitalize on the growing demand for derivatives while navigating regulatory challenges.
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