Coinbase Acquires Crypto Options Exchange Deribit for $2.9B in Cash and Stock Deal

Coinbase Inc (NASDAQ:COIN) is acquiring crypto options exchange Deribit for approximately $2.9 billion in a cash-and-stock deal.

What Happened: The deal will be completed with $700 million in cash and 11 million shares of Coinbase Class A stock, valued at approximately $1.2 billion at Monday’s closing price. It is still subject to regulatory approval and customary closing conditions, and is expected to be finalized by the end of the year.

Once finalized, it will make Coinbase the largest crypto derivatives platform by open interest and options volume.

Deribit, known for its advanced options and derivatives products, currently processes over $1 trillion in annual trading volume across non-U.S. markets and has $30 billion in open interest, mainly from institutional and professional traders.

The deal gives Coinbase an immediate foothold in the rapidly expanding options segment, allowing it to expand its existing U.S. futures and global perpetuals business into a more comprehensive derivatives offering.

With this move, Coinbase aims to provide spot, futures, perpetuals, and options trading all accessible through a single platform.

Why It Matters: The firm is making a strong bet on crypto options to follow a similar trajectory to equity options in the 1990s, presenting an opportunity for a significant long-term growth market. It is expected that adding Deribit will contribute to greater revenue stability and profitability for Coinbase.

Options trading is known for its resilience in diverse market conditions, which is a factor that contributes to Deribit’s consistently realized profitability.

This acquisition also marks a strategic move by Coinbase to expand its footprint in the international arena.

While U.S. customers can already access futures products via Coinbase Financial Markets and Coinbase Derivatives Exchange, and U.S. institutional investors are covered by Tagomi, the Deribit acquisition expands the company’s offerings for professional and institutional traders in a broader capacity.

Coinbase highlighted Deribit’s sustained profitability and the professional client base it brings, both of which align with the company’s long-term strategy in expanding its institutional trading services.

This is the latest addition to Coinbase’s acquisitions focused on expanding its offerings for institutional investors.

Earlier this year, Coinbase completed the acquisition of Xapo to strengthen its custody services and Tagomi for its prime brokerage services. In 2022, Coinbase acquired FairX to expand its futures exchange capabilities and One River Digital to expand its institutional asset management services.

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