Coinbase Is on an Acquisition Spree—Are Competitors Ready?
Coinbase intends to expand its operations with additional acquisitions after its record-setting $2.9 billion acquisition of Deribit, the largest deal in crypto history.
CEO Brian Armstrong revealed the exchange’s plan for a mergers and acquisitions (M&A) strategy focused on global expansion in the derivatives market.
Deribit Buy Puts Coinbase at the Heart of Global Trading
On May 8, 2025, the firm completed the acquisition of Deribit, a top crypto derivatives exchange, for $2.9 billion in stock and cash, including $700 million in cash and 11 million Class A common shares.
The largest crypto deal on record is set to close by the end of the year and adds options and perpetual futures to the exchange’s product offerings.
Deribit, which the exchange describes as consistently profitable, saw over $1 trillion in trading volume in 2024 and currently holds $30 billion in open interest.
The acquisition is expected to further strengthen Coinbase’s presence in Asia and Europe, regions with significant leverage trading activity. Deribit’s contribution was seen by U.S. Tiger Securities analysts as a way to make the exchange more global.
Despite a 10% revenue decline to $2.03 billion in Q1 2025—missing the $2.12 billion estimate—the exchange’s $9.9 billion in U.S. dollar resources provides enough balance sheet capacity for additional deals.
Armstrong Signals Hunger for Strategic Buys
Speaking on Bloomberg Television on May 14, 2025, Armstrong confirmed, “We are always on the lookout for M&A opportunities,” revealing plans for additional deals.
This comes ahead of Coinbase’s inclusion in the S&P 500 on May 19, 2025, a decision expected to improve its market profile.
Armstrong emphasized targeting international opportunities and partnerships with firms sharing the same vision as Coinbase for product innovation and growth. No specific targets were disclosed, though Armstrong dismissed April 2025 speculation about acquiring stablecoin issuer Circle, saying, “nothing to announce.”
The Deribit deal is said to be a signal of competition, with Kraken’s $1.5 billion acquisition of NinjaTrader LLC in March 2025.
The exchange’s Q1 net income fell 95% to $65.6 million, due in part to a $596 million loss on crypto assets, yet its M&A strategy remains intact.
Coinbase Faces Challenges as It Chases Crypto Market Share
The Deribit acquisition positions Coinbase to capture a larger share of the growing crypto derivatives market following rising global trading volumes.
Armstrong’s focus on high-adoption regions means that subsequent targets are Asian or European platforms. Bernstein analysts maintain an “outperform” rating and attribute that to its derivatives strategy.
Coinbase share price (Source: Google Finance)
However, the exchange faces major challenges, including regulatory pressure and market volatility, which could complicate future deals.
The Q1 earnings miss shows financial pressures, but Armstrong’s proactive strategy and Coinbase’s strong balance sheet mean that more acquisitions are likely.
