Coinbase acquires Deribit for $2.9B, the largest M&A event in cryptocurrency history.

Compiled by: Luffy, Foresight News

Written by: Saurabh Deshpande

Compiled by: Luffy, Foresight News

Coinbase acquires Deribit for $2.9 billion, the largest M&A event in cryptocurrency history. The same is true of history in the tech space. Google has acquired 261 companies to date. These acquisitions gave rise to products such as Google Maps, Google AdSense, and Google Analytics. Perhaps the most significant of these was Google’s acquisition of YouTube in 2020 for $1.65 billion. In the first quarter of 2025, YouTube generated $8.9 billion in revenue, accounting for 10% of Alphabet’s (Google’s parent company) total revenue.

Similar to Google, Meta has made 101 acquisitions to date. Instagram, WhatsApp, and Oculus are prominent examples. Instagram generates more than $65 billion in annual revenue in 2024, accounting for more than 40% of Meta’s revenue from all businesses.

The cryptocurrency industry is no longer a new industry. It is estimated that the number of cryptocurrency users has reached 659 million, Coinbase has more than 105 million users, and the global Internet users are about 5.5 billion. So, cryptocurrency users have reached 10% of the total Internet users. These numbers are important because they help us determine where the next stage of growth will come from.

Increasing the number of users is an obvious way to grow. Currently, we have only developed use cases for cryptocurrencies in the financial sector. If other applications use blockchain technology as infrastructure, the entire market size will expand significantly. Acquiring existing users, cross-selling, and increasing revenue per user are some of the ways that existing companies can achieve growth.

When the pendulum swings toward acquisitions

Acquisitions solve three key problems that financing alone cannot. First, acquisitions help with talent acquisition in highly specialized fields where experienced developers are scarce. Second, acquisitions help with user acquisition in an environment where organic growth is increasingly expensive. Third, acquisitions can facilitate technology integration, allowing protocols to move beyond their original use cases. These issues will be further explored in the following article with industry examples.

We are in the midst of a new wave of M&A in crypto. Coinbase acquired Deribit for a record $2.9 billion; Kraken acquired NinjaTrader, a retail futures trading platform regulated by the US Commodity Futures Trading Commission (CFTC), for $1.5 billion; and Ripple acquired multi-asset prime broker Hidden Road for $1.25 billion, having also made a bid for Circle that was rejected.

These deals reflect the changing priorities in the space. Ripple wants distribution and regulatory access, Coinbase is after options volume, and Kraken is filling a product gap. These acquisitions are all driven by strategy, survival, and competitive positioning.

The table below can help you understand the thinking of existing companies when considering whether to build or acquire.

While the table summarizes the key trade-offs in the build vs. buy decision, incumbents often rely on unique signals when making decisive moves. A good example is Stripe’s acquisition of Paystack in Nigeria in 2020. Building infrastructure in Africa means facing a steep learning curve in terms of regulatory details, local integrations, and merchant onboarding.

Stripe chose to acquire. Paystack had already solved local compliance issues, built a merchant base, and demonstrated its distribution capabilities. Stripe's acquisition met multiple criteria, such as speed (gaining first-mover advantage in a growing market), capability gap (local expertise), and competitive threat (Paystack becoming a regional competitor). This move accelerated Stripe's global expansion without distracting from its core business.

Before we dive into why deals happen, it’s worth considering two questions: first, why founders should consider being acquired, and second, why now is an important time to consider it.

Why is the current macro environment favorable for acquisitions now?

For some, it’s about liquidity at exit. For others, it’s about tapping into more durable distribution channels, securing long-term growth, or being part of a platform that can amplify impact. And for many, it’s a way to sidestep the increasingly narrow path to venture capital, now more scarce than ever, with investor expectations higher and timelines tighter.

A rising tide does not lift all boats

The venture capital market lags the liquid market by several quarters. Typically, whenever Bitcoin prices peak, it takes months or quarters for venture capital activity to cool down. Venture capital in the crypto space is down more than 70% since the 2021 peak, and median valuations are back to 2019-2020 levels. I don't think this is a temporary pullback.

Let me explain why. In short, VC returns have fallen, while the cost of capital has risen. So there is less VC money chasing deals because the