Crypto on Track for M&A Record With Coinbase’s $2.9B Derebit Takeover

Coinbase wanted more options. The leading US crypto exchange says it found them in an agreement to buy Derebit for $2.9 billion, marking the crypto industry’s largest deal to date. 

The acquisition, expected to close before the end of the year, would give Coinbase a new revenue stream and help it stretch further into international markets as crypto companies jockey for global dominance. 

The buy marks a major step into derivatives: Derebit handled more than $1.2 trillion worth of transactions last year, and it’s the No. 1 platform globally for trading bitcoin and ether options. 

Released from the Kraken

The deal ends a months-long bidding battle between Coinbase and Kraken, a rival crypto exchange. Kraken instead bought derivatives broker NinjaTrader last week for $1.5 billion.

While global deal-making fell to a 20-year-low last month, crypto has been a hot spot for M&A as the industry moves fast to take advantage of a pro-crypto political moment. President Trump said he’ll build the US into the planet’s crypto capital and has been swapping out regulators who led a crypto crackdown during the Biden era for friendlier overseers.

The digital-asset industry, flush with funds from post-election investors, has been on a shopping spree this year:

• As of April 23, before Coinbase’s and Kraken’s latest acquisition announcements, the crypto industry had already made 88 deals valued at $8.2 billion, according to Architect Partners. That’s nearly triple the volume of all the transactions made in the sector last year. The industry’s on pace to beat its 2021 record of $17 billion worth of deals. 
• Just last month, crypto network Ripple said it’ll acquire prime broker Hidden Road for $1.3 billion and the bitcoin-centric Twenty One Capital went public through a $3.6 billion SPAC merger. 

Get It While It’s Hot: The crypto industry is sizzling after a long winter, and companies are making moves fast before it has the chance to cool down. Investors piling into the space bulked up companies’ cash reserves to spend on M&A. Coinbase’s first-quarter revenue climbed on a trading surge, while Derebit’s trading volumes nearly doubled last year from post-election institutional investment. Coinbase, which plans to pay for Derebit with a combination of cash and stock, has the financial wiggle room for more buys this year as it looks to better compete with global leader Binance.