In recent years, compliant exchanges such as Coinbase and Kraken have been competing in derivatives trading. On May 8th, Coinbase announced the acquisition of Deribit for a record-breaking $2.9 billion, surpassing Kraken's $1.5 billion acquisition of derivatives platform NinjaTrader on March 20th, making it the highest single acquisition transaction in the crypto field.
Coinbase's recent financial report shows that its Q1 2025 revenue grew 24% year-on-year but declined 10% quarter-on-quarter, falling short of market expectations ($2.105 billion). Net profit plummeted 94% year-on-year to $66 million. Q1 trading revenue decreased 19% to $1.2 billion, with trading volume dropping 10%. After the announcement, Coinbase's stock price rose 6%. According to Benchmark's analysis, the acquisition will enhance Coinbase Prime's platform and institutional attractiveness, gradually gaining crypto options pricing power. Will this acquisition trigger explosive growth in Coinbase's derivatives business and potentially salvage long-term stock price expectations?
In the US market, Coinbase primarily focuses on spot trading, while Deribit, known for derivatives, manages most crypto options trading volume. According to CoinGecko data, Coinbase and Kraken rank 33rd and 34th in derivatives trading, which lacks sufficient depth and liquidity to attract traders.
As a professional derivatives trading platform, Deribit focuses more on professional traders and institutions compared to crypto exchanges like Binance and Coinbase, enjoying high recognition in this group. Data shows its 2024 trading volume approached $1.2 trillion, with daily derivatives trading reaching $2.8 billion.
From a market structure perspective, derivatives trading has long been the backbone of the crypto industry. According to Coinglass, global crypto derivatives' daily average trading volume in 2024 reached hundreds of billions of dollars, far exceeding spot market trading. Among exchanges, market distribution varies significantly. For instance, Binance's daily trading volume reaches $110 billion, far surpassing Coinbase International's total contract volume. Thus, Coinbase needs a platform to handle future crypto derivatives trading demand.
In terms of total open interest, Deribit consistently maintains billions in options scale, accounting for over 90% of the total market. Coinbase is particularly interested in the financial benefits (trillions in options trading volume) and growth potential from large options holdings. Coinbase also noted that Deribit has a "stable profitability record" with consistently positive adjusted EBITDA, expecting further profit enhancement post-merger.
The acquisition includes $700 million in cash and 11 million Coinbase common shares. Based on Deribit's 2024 trading volume, its annual fee income is approximately $420 million (at 0.035% rate), with a significantly lower price-to-sales ratio compared to peers (like Robinhood's 15x). Analysts predict that integrating Deribit will increase Coinbase's daily derivatives trading volume by 40%, diversifying trading revenue. Derivatives income may reach over 30% by 2026, making the transaction cost-effective in the long term.
Previous Coinbase strategic acquisitions included Xapo (wallet service, now Coinbase Custody), Tagomi (broker, now Coinbase Prime), FairX (compliant derivatives platform, transformed into Coinbase Derivatives), and One River Digital (now Coinbase asset management). This acquisition reflects that amid spot market contraction, the vast futures market can provide new growth opportunities for Coinbase.
Additionally, Deribit's long-term dependence on options business has led competitors to attract users through high leverage, low fees, and diversified derivatives. Through Coinbase's acquisition and integration, its global user base (especially institutional clients via Coinbase Prime) can complement Deribit's professional derivatives capabilities.
Amid such business scale growth temptation, Coinbase has recently been generously "distributing coins". In the past two weeks, a rumored activity offering 200 USDC to new derivatives customers has circulated, attracting massive user influx. Due to region-specific participation requirements, it even triggered a rush for address verification.
Bernstein analysts suggest that as the industry develops towards "one-stop" multi-asset platforms, crypto exchanges and brokers are making significant merger and acquisition moves. Coinbase continues to expand compliant exchange business boundaries. With Kraken and Coinbase entering derivatives, transitioning from spot-only to multi-directional trading, we can anticipate gradual business line improvements in European and US markets, with the competitive landscape just beginning to take shape.
