In a major move towards digital assets, trading platform Robinhood Markets has acquired Bitstamp, a cryptocurrency exchange, for approximately $200 million in cash.

Before the bell, Robinhood's stock was up 3.4%. The company has been trying to grow its product line in order to become a full-fledged provider of financial services.

Robinhood will now compete with major players like Binance and Coinbase after acquiring Bitstamp, an organization founded in 2011 with 50 active licenses and registrations worldwide. With over 85 tradable assets, Bitstamp's core spot exchange is well-liked in Europe and Asia. The acquisition is anticipated to fuel the expansion of Robinhood Crypto. The agreement is expected to be completed by the first half of 2025, at the same time as the company's fast growth in the cryptocurrency industry and the regulatory obstacles in the US.

Robinhood had strong earnings in the first quarter of May, mainly due to its cryptocurrency business. However, it also disclosed that it had received a "Wells notice" regarding tokens traded on its platform from the U.S. Securities and Exchange Commission. When a corporation is the target of an enforcement action by the regulator, a notification is sent out. Cryptocurrency tokens, according to the market regulator, ought to be regarded as securities and registered under its regulations. However, cryptocurrency companies have charged that the SEC has gone too far.

This year, Robinhood's stock has increased 69% after the company said that it would be concentrating on "profitable growth." Experts anticipate additional expansion. Bitstamp and Robinhood had exclusive financial advisers at Barclays Capital and Galaxy Digital, respectively.