‘$1 trillion company some day’: Coinbase’s record-setting Deribit deal signals big bet on crypto's institutional future

Coinbase has acquired Deribit in a record-setting $2.9-billion deal in the crypto space, a move that will give the U.S.-based crypto exchange an immediate and dominant foothold in the high-growth derivatives space amid growing institutional adoption of digital assets.

"This is an insanely great acquisition," Bitwise CIO Matt Hougan said in a post on X. "Coinbase is going to be a $1 trillion company some day."

Deribit is the world's largest platform for bitcoin and ether options, with a trading volume of nearly $1.2 trillion in 2024. The firm is known for its range of derivatives products, including perpetual swaps and European-style options. Its trading tools cater to institutional and high-frequency traders, which could strengthen Coinbase's Prime platform and institutional appeal, according to Benchmark.

"The company’s global dominance in the crypto options space has been reflected in its consistently high open interest and trading volumes, often surpassing competitors such as CME Group and Binance in these categories," Benchmark equity analyst Mark Palmer wrote in a flash note to clients. "Deribit also provides real-time market data feeds tailored for algorithmic and high-frequency traders."

Palmer has a "buy" rating and $252 price target on Coinbase's stock.

The $2.9 billion includes $700 million in cash and 11 million shares of Coinbase common stock (ticker COIN), something Spencer Yang called "a great bargain" for shareholders since it helps the company expand globally. The deal surpasses the previous industry high, which was Kraken's $1.5 billion purchase of NinjaTrader.

"Global derivatives trading is a key driver of growth for Coinbase," said Yang, co-founder of Fractal Bitcoin and former head of product at Coinbase Wallet. "[Deribit's] platform has a strong operating history and is the only major independent company with similar DNA to Coinbase."

Coinbase currently offers futures trading in the U.S., as well as spot and perpetual futures trading in international markets.

"I’d love to see Coinbase also offer Bitcoin options trading via broker-dealer on MSTR/IBIT to complement the custodial exchange Deribit acquisition, which is better for global growth," Yang stated in an email. "Coinbase also has the FCM/DCM license and with this has captured all possible regulated and self-regulated derivatives products."

Crypto exchanges and broker/dealers are making "M&A power moves" as the industry heads toward "one-stop-shop" multi-asset platforms, The Block's James Hunt reported in March, citing Bernstein analysts.

The analysts said the U.S. crypto derivatives market has room to grow, with offshore perpetual futures markets trading three to four times more than spot markets. Last year, Bitcoin and Ethereum futures totaled $31 trillion offshore, compared to about $2.5 trillion on the U.S.-based CME.

Coinbase shares traded higher by 5.2% to $206.88 at publication time, according to The Block's COIN price data. The company is scheduled to release quarterly earnings after the closing bell.