Coinbase Acquires Deribit for $2.9 Billion to Expand Crypto Derivatives Market

Coinbase, a leading global cryptocurrency exchange, has announced its acquisition of Deribit, a prominent crypto derivatives exchange, for $2.9 billion. This strategic move underscores Coinbase's growing interest in the crypto derivatives market and its ambition to expand its global presence. The deal involves a $700 million cash payment to Deribit, with the remainder to be settled in Class A stock. This payment structure may slightly delay the finalization of the deal, but it is expected to close by the end of the year.

Coinbase first initiated discussions with Deribit in late March, following Deribit's public evaluation of buyout offers in January. Initially, Kraken reportedly rejected a proposal to acquire Deribit for $4-5 billion. However, Deribit eventually accepted a lower offer from Coinbase. The reasons behind Deribit's decision to accept a lower valuation are not entirely clear, but it is speculated that the exchange's departure from Russia due to EU sanctions may have contributed to its reduced valuation.

With this acquisition, Coinbase aims to become the leading global platform for crypto derivatives by open interest and options volume. Deribit brings approximately $30 billion in open interest and over $1 trillion in trading volume, significantly enhancing Coinbase's capabilities in the derivatives market. Coinbase has been active in this market for nearly four years and recently launched CFTC-regulated XRP futures contracts. The partnership with Deribit is expected to supercharge these operations, providing unparalleled access to crypto derivatives.

Deribit executives will receive the majority of their $2.9 billion asking price in Class A stock from Coinbase, with $700 million paid in cash and the rest in 11 million shares. This transaction is expected to close by the end of the year, although the stock payment may cause a slight delay. Coinbase has not specified how it plans to leverage Deribit's resources for its expansion plans, but the firm's public statements repeatedly emphasize Deribit's leadership in the crypto derivatives market. By acquiring Deribit's user base and trading volumes, Coinbase has gained numerous opportunities to take over the spotlight in the derivatives market.

Coinbase's share prices have shown significant recovery since the recent tariffs, surging over 36% since April. The exchange is preparing to release its Q1 2025 earnings report, which is expected to reflect the positive impact of this strategic acquisition. The deal is a major step in Coinbase's global expansion strategy, positioning the company as a dominant player in the crypto derivatives market.