Bitstamp Hunts for Funds: Crypto Exchange Plans Derivatives Trading Launch in Europe

One of the oldest cryptocurrency exchanges, Bitstamp, plans to rebuild its image and retain its previous position as it seeks new investors. The information was confirmed by its CEO, Jean-Baptiste Graftieaux who revealed that the funds would be used to launch derivatives trading in Europe and expand the operations in the UK and Asian markets.

Bitstamp Looks for a Strategic Investor

In a conversation with Bloomberg, Graftieaux denied that the platform, which has been operating for over 12 years, is seeking a buyer. He mentioned that the company is not for sale, and its management aims to gather additional funding by attracting a strategic investor. This would accelerate its current growth and introduce new products and services to an expanding base of institutional and retail customers. However, fundraising began two months ago, with Galaxy Digital Holdings participating as an advisor.

It is worth noting that Bitstamp, based in Europe, was once one of the largest cryptocurrency exchanges, competing with the now-defunct Mt. Gox. Since then, the significance of the exchange has diminished, but it still ranks among the top ten cryptocurrency entities in terms of volume. In the last 24 hours, its turnover has exceeded $133 million. In comparison, the turnover for the top-ranking exchange, Binance, is nearly $7 billion, and for Coinbase, it is just under $900 million.

Since 2018, NHMH (a European investment company that belongs to NCX) has assumed ownership of Bitstamp. This year, another crypto company Pantera decided to sell its minority shares in Bitstamp, which Ripple acquired.

Bitstamp Gains Market Share in the US

This year, according to data from Kaiko, Bitstamp's US branch, which holds a BitLicense issued by New York State, has gained market share locally. Meanwhile, other popular platforms, such as Binance US, have become less significant, partly due to regulatory issues and lawsuits.

Based on June data, Binance US's market share has dropped from 8.2% to just 1.5% due to the ongoing legal battle with the Securities and Exchange Commission (SEC). Coinbase remains the biggest player in the US market, accounting for over 50% of all transactions.

However, due to the decline of Binance US, the US branch of Bitstamp, along with other exchanges like Kraken and LMAX, have begun to see a benefit.

More Exchanges Introducing Derivatives Trading

As mentioned above, Bitstamp plans to use the funds raised to expand its European derivatives trading offerings. This move is not isolated, as more cryptocurrency exchanges are opting for a similar solution.

FTX dominated the crypto derivatives market, but the exchange collapsed in November of the previous year. Other exchanges, including Binance, Coinbase, and Gemini, have since attempted to capture a portion of that lucrative market segment. For them, this indirectly addresses regulatory pressures in the US, as derivative trading is offered through branches registered outside the United States.

Now, Bitstamp has plans to launch a similar service, but it all depends on whether the exchange can secure a strategic investor.