Robinhood just made a very big bet on crypto: What the $200 million Bitstamp deal means for the company

I didn't see that coming. On Thursday, Robinhood announced it is buying long-running crypto exchange Bitstamp for $200 million, a move that has big implications for both the company and the broader crypto industry. The deal will add four million to five million new crypto customers for Robinhood but, more significantly, it will also let the popular trading app take over the 50 or so licenses that Bitstamp has in Europe and around the world.

Before looking at whether the deal is a good idea for Robinhood, it's worth taking a minute to acknowledge Bitstamp's contribution to crypto's development. Launched in Slovenia way back in 2011—a time when the entire industry was little more than swapping Bitcoin—the exchange for a time was one of the only trusted places to do business. Bitstamp was also instrumental in establishing crypto in Europe and, along with ill-starred Mt. Gox, was one of the biggest names in crypto's frontier era. It's unlikely the exchange's founder envisioned that it would one day be bought by a Silicon Valley firm best known as a place for millennials to trade stocks but, well, business is unpredictable.

As for Robinhood, the deal raised my eyebrows for a few reasons. First, it underscores just how dramatically the company's fortunes have changed. Just a year ago, the company was posting a series of ghastly losses in its quarterly earnings and looked a lot more like it would be the target of an acquisition rather than pursuing one. The fact Robinhood plans to complete the $200 million deal all in cash shows it is in a very different financial place.

The decision to acquire Bitstamp also shows that, despite its recent trials, Robinhood has not become risk averse but very much has its foot on the gas. The move comes shortly after the company pushed into the credit card and retirement account business, meaning Robinhood will have to prove it can execute like never before or else risk going off the rails once again in the next downturn.

The biggest takeaway from the Bitstamp deal, though, is that Robinhood's CEO, Vlad Tenev, very much sees crypto as one of the pillars of the company's growing financial empire. This is consistent with his decision to keep investing in expensive-to-build wallet technology during the depths of Crypto Winter, and to stick with the sector even as revenues dried up. The decision to buy Bitstamp is a gamble, but, if it works, it will provide a way to introduce the Robinhood brand to new markets around the world and sell not only crypto but its growing number of other products, too.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

This story was originally featured on Fortune.com