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US cryptocurrency exchange Coinbase has agreed to buy Dubai’s Deribit for $2.9bn in the digital market’s largest ever deal as the industry prepares for an expected wave of demand from asset managers and banks.
California-based Coinbase will pay $700mn in cash and the remainder in shares for Deribit, which last year handled trading volumes of more than $1tn, making it the world’s largest market for cryptocurrency derivatives.
“We believe crypto options are on the cusp of significant expansion, similar to the equity options boom of the 1990s,” said Greg Tusar, head of institutional product at Coinbase.
Coinbase shares jumped nearly 5 per cent to about $206 in early New York trade on Thursday. They are down about 20 per cent since the start of the year as some optimism over Donald Trump’s presidency has faded.
However, bitcoin prices have surged more than 40 per cent to nearly $100,000 since Trump was elected in November after his promise to make the US “the crypto capital of the world” with light touch regulations.
Enforcement cases have since been dropped while regulators have eased rules to allow banks to hold digital assets on behalf of customers.
This helped the market shrug off worries over the US president’s “liberation day” tariff blitz and spurred dealmaking this year.
Last month Ripple, the payments business, bought prime broker Hidden Road for $1.25bn while Abu Dhabi’s MGX agreed to plough $2bn into Binance, the world’s largest exchange, using the currency of World Liberty Financial, which is backed by Trump and his family.
Many traders use derivatives to borrow heavily and supercharge their crypto bets, in a market that was hit hard three years ago.
The industry struggled in 2022 with a series of high-profile bankruptcies, hacks and token crashes that eroded investor trust, most notably the failure of Sam Bankman-Fried’s FTX exchange.
Mark Palmer, a senior equity analyst with the Benchmark Company, said the deal “would give (Coinbase) an immediate and dominant foothold in the high-growth derivatives space ahead of an anticipated increase in institutional adoption of digital assets”.
The FT previously reported that Deribit had been looking to enter the US market because of Trump’s pledge to make the US a market leader. Crypto exchanges such as OKX and Nexo have already laid plans to set up US offices.
“As the leading crypto options platform, we’ve built a strong, profitable business, and this acquisition will accelerate the foundation we laid while providing traders with even more opportunities across spot, futures, perpetuals and options — all under one trusted brand,” said Deribit chief executive Luuk Strijers.
The deal, which needs regulatory approval, is due to close at the end of the year.
The company will release first-quarter earnings after the market closes.
