Coinbase chief executive Brian Armstrong has signaled that the company will continue to explore mergers and acquisitions after its recent $2.9b deal to acquire the crypto derivatives exchange Deribit.
Speaking to Bloomberg Television on Wednesday, Armstrong reaffirmed Coinbase’s commitment to growth through strategic acquisitions, noting that the company has ample financial resources to pursue such opportunities.
“We are always looking at M&A opportunities,” Armstrong said. “We have a large balance sheet that can be put to use. Part of the benefit of being a public company is, you have a liquid currency to do that.”
Further, Armstrong said that while Coinbase is actively considering acquisitions, it is selective about which opportunities to pursue.
Armstrong Silent on Potential Circle Acquisition
The CEO specifically pointed to international markets and companies with similar business models as areas of focus for future acquisitions.
When asked about the possibility of acquiring stablecoin issuer Circle, with which Coinbase already shares revenue, Armstrong did not provide a definitive answer, stating he had “nothing to announce today.”
Meanwhile, Ripple’s attempt to acquire Circle was reportedly rejected as its offer was deemed too low. Circle has also filed to go public.
Deribit Deal Solidifies Coinbase Strategy to Expand into Crypto Derivatives Market
Coinbase’s acquisition of Deribit, the largest global exchange for Bitcoin and Ether options, is a significant move. It reflects the company’s goal to strengthen its position in the crypto derivatives market.
The $2.9b deal includes $700m in cash and 11m shares of Coinbase stock. This is subject to typical purchase price adjustments. In 2022, Deribit processed nearly $1.2t in volume. This shows the strategic importance of the acquisition as Coinbase works to diversify its offerings.
The exchange has long been an active player in the crypto M&A space, consistently seeking to expand its market footprint. Armstrong’s comments suggest that the company will maintain this aggressive growth strategy, particularly in markets that can help accelerate its product development and growth.
As it continues to build on its growth trajectory, the company is also poised to join the prestigious S&P 500 index next week.
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