Ripple Strengthens Its European Presence with Acquisition of Pantera’s State at Bitstamp Crypto Exchange in Q1

Following a string of hostile crypto regulatory frameworks in the United States and the lack of goodwill from the Securities and Exchange Commission (SEC) to stop enforcement actions, digital assets firms have opted to diversify through Europe or other friendly markets. Already, several centralized exchanges – including Gemini Trust Company LLC and Coinbase Global Inc (NASDAQ: COIN) – have shifted focus to seeking regulatory approvals in crypto-friendly markets like the European Union.

Ripple Gains EU Traction via Bitstamp

According to the first quarter 2023, shareholder transcript from Galaxy Digital Holdings Limited that was released on May 9, Ripple Labsacquired the majority stake in one of the oldest centralized exchanges, Bitstamp, for an undisclosed price. Reportedly, Ripple purchased the Bitstamp stake belonging to Pantera Capital after investment advice from Galaxy Digital.

“More broadly in our global markets business, on the back of a record year for our investment banking team, we advised Pantera, a leading blockchain asset management firm, on the sale of its stake in European digital asset exchange Bitstamp to Ripple Labs in Q1,” said Galaxy president and chief information officer Chris Ferraro.

Founded in 2011 during the era of Mt.Gox, Bitstamp has grown to serve more than 4 million global customers from over 100 different countries. Interestingly, the Luxembourg City-headquartered crypto exchange takes pride in being the first CEX to be regulated in the EU back in 2016.

Over the years, Bitstamp has given Ripple’s XRP much focus despite the ongoing lawsuit in the United States. According to market aggregate data from Binance-backed Coinmarketcap, XRP is the second most traded digital asset on Bitstamp after Bitcoin, whereby the XRP pairs with EUR and USD have a total of 20 percent in its traded volume. The exchange also offers other XRP trading pairs including Bitcoin and the British pound.

Notably, Pantera Capital was one of the largest shareholders of Bitstamp until 2018 when Belgium-based investment firm NXMH stepped in. According to the investment details, Pantera Capital sold its 80 percent stake in Bitstamp to NXMH in an all-cash deal.

Before the 2017 crypto bull market, Bitstamp was valued at approximately $60 million, up from $39 million in 2014. The valuation has since significantly scaled following the ongoing mainstream adoption of crypto assets and blockchain technology.

Market Outlook

Ripple Labs recently announced that it has spent nearly $200 million in fighting the SEC in an ongoing lawsuit. The company has, however, threatened to leave the United States market for much more welcoming places like the Middle East and European region. Furthermore, XRP liquidity has been thinning in the United States compared to other markets like Asia and Europe.

Moreover, XRP trading volume is mostly from non-US crypto exchanges including Bithumb from South Korea.