Robinhood’s Crypto Push Now Goes Global: First Stop, the UK

Weeks after its crypto wallet was extended to more than two million users in the United States, Robinhood Markets has now cast its eyes overseas.

Robinhood (HOOD) has entered into an agreement to buy a British electronic money and crypto-asset company, Ziglu, subject to approval from relevant authorities. 

Ziglu provides UK-based clients the opportunity to purchase and sell about 11 crypto assets and earn on their holdings. In the UK, the firm is registered as a crypto asset business with the financial regular in line with the anti-money laundering and counter-terrorism finance regime. 

Ziglu Acquisition to Help Robinhood Go Global 

Valad Tenev, the CEO of Robinhood and co-founder, said that they would work with Ziglu to leverage the two companies to explore new ways to overcome barriers for clients in both the UK and Europe. The deal is expected to assist the company to go global. 

In the short term, Ziglu clients will continue enjoying the services they got from the company just like before the acquisition. Later, the customer base would be integrated into the Robinhood operations fully. 

The news only moved Robinhood stock price slightly, pushing it up by 1% during the early trading hours of Wednesday. 

Wall Street appears unsure of whether the move to grow digital assets will yield significant impacts. The company is already facing turbulence from reduced trading, especially from retail investors that form the core of its base, both in cryptos and stocks. In 2022, Robinhood shares are down 40%.

Experts at Goldman Sachs were firm in their response on Robinhood, indicating it is likely to sell from a neutral starting early April 2022 because of softening retail engagement. Again, the limited path to short-term profitability is likely to drag down the stock performance in the coming years. 

Will Nance, the team leader at Goldman Sachs, explained that while Robinhood has negotiated excellently in crypto trading economics, we predict a decline in the crypto volumes, which will likely erode its gains.

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