Coinbase announces a $2.9 billion acquisition of Deribit to strengthen its position in the crypto options market, targeting both international retail and institutional investors. The deal comprises $700 million in cash and 11 million shares. This aligns with a trend of increasing mergers in the crypto space, as firms aim to expand their user bases amid improving regulatory conditions.
In a significant move to enhance its presence in the crypto options sector, Coinbase, the biggest publicly traded cryptocurrency exchange, announced on Thursday its acquisition of derivatives exchange Deribit for a hefty $2.9 billion. This strategic buy aims to attract both retail traders and institutional investors, expanding Coinbase’s reach particularly in Asia and Europe, where leveraged trading is notably more common.
The acquisition will see Coinbase providing crypto options to international clients, a product that is crucial for hedging and often remains in demand during market volatility. Analyst Bo Pei from US Tiger Securities pointed out that this purchase grants Coinbase a solid position outside the U.S., enabling the exchange to tap into markets where the appetite for derivatives is growing.
The financial details of the deal indicate it is composed of $700 million in cash plus 11 million shares of Coinbase’s Class A stock. Furthermore, while Coinbase has only recently begun to solidify its footing in the derivatives arena, it has already reported record shares in both consumer and institutional derivatives volume in the preceding quarter.
“Should domestic regulators legalise crypto options and perpetual trading, Coinbase is likely to act immediately to provide these capabilities for U.S. clients, potentially boosting revenues significantly,” says Steven Nie, an analyst at Daiwa Securities. This acquisition also aligns with U.S. President Donald Trump’s backing of digital currencies, as he advocates for the U.S. to take a leading role globally in the cryptocurrency sector.
Encouraged by a more positive regulatory outlook, other cryptocurrency firms are also making notable acquisitions to grow their footprint. Last month, Ripple invested $1.25 billion in Hidden Road, a multi-asset prime broker, marking it as one of the largest acquisitions in its history. Furthermore, Kraken announced in March plans to purchase NinjaTrader, a retail futures trading platform, for $1.5 billion.
The sentiment in the market seems to indicate that more consolidation is on the horizon, particularly driven by American firms. “We can expect an uptick in mergers and acquisitions within the crypto segment, propelled by U.S. players seeking expansion,” noted analyst Pei. Coinbase’s shares reacted positively to the news, rising by 5.7%, despite experiencing a near-21% drop earlier this year. The exchange is set to release its first-quarter earnings after market close today.
This acquisition not only marks a critical step for Coinbase but also signals a growing trend of consolidation among cryptocurrency exchanges, reflecting the industry’s ongoing evolution as it seeks to cater to a rapidly maturing trading community.
