The Bitstamp acquisition is a strategic transfer by Robinhood to develop its crypto enterprise, the report stated.
Bernstein stated that by buying an alternate the buying and selling platform can supply markets in lots of extra tokens.
JMP stated it does not anticipate materials accretion from the deal.
Robinhood’s (HOOD) acquisition of Bitstamp is a strategic transfer by the buying and selling platform to develop its crypto enterprise and positions the corporate properly towards opponents akin to 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 provides 15 cryptocurrencies to retail traders within the U.S. and greater than 30 tokens in Europe, whereas Bitstamp lists over 85 tokens, the report stated. By buying an alternate the buying and selling platform can supply markets in much more tokens.
“With a full alternate, HOOD will get entry to world liquidity, and thus can supply the liquidity to its personal dealer platform, doubtlessly bettering its economics,” analysts Gautam Chhugani and Mahika Sapra wrote.
Exchanges supply a variety of companies akin to staking, stablecoins, buying and selling, custody and prime broking, the observe stated. The acquisition of Bitstamp doubtlessly permits Robinhood to supply a wider vary of crypto merchandise to a extra institutional consumer 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 alternate will give Robinhood alternatives to attach extra deeply into the crypto ecosystem and will enable the platform to get extra concerned within the tokenization of belongings 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 greatest, JMP stated it doesn’t anticipate 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
