When Andy Chen, a retail investor based in Durham, N.C., started buying cryptocurrency, he chose to use Base, the app from Coinbase. But because it charged transaction fees, he eventually moved to Robinhood.
“If you buy $100, you need to pay around 2% transaction fees on Base, which is around $2,” Chen said. “It’s not much, but why do I need to pay that? Robinhood doesn’t charge you that.”
It’s a problem Coinbase is looking to solve – continuing to grow and expand its product offerings to keep investors amid mounting competition, all without slashing the fees that make the company profitable. To retain its competitive edge, Coinbase has been on an acquisition spree in the U.S. and abroad.
In May, Coinbase acquired Deribit, a European crypto exchange known for options and futures trading, in a cash and stock deal valued at about $2.9 billion, continuing a trend of expanding through mergers and acquisitions (M&A). In 2022, the company acquired FairX, a small U.S. futures exchange, and rebranded it as Coinbase Derivatives. The next year, it bought One River Digital, an institutional asset management firm. Coinbase launched its international exchange for institutional and retail investors in 2023, and the company is seeking licenses in Europe, Singapore, Brazil, and Canada.
“They do have global ambitions,” said Joseph Vafi, an analyst at Canaccord Genuity, an investment banking and financial services company based in New York. “We continue to see more M&A activity out of them globally to accelerate global expansion. “M&A is also good for adding new areas of revenue where they may not have it right now yet, like the derivative acquisition in options.”
Coinbase’s buying spree has been emboldened by the regulatory environment, which is more lenient than ever as President Trump aims to make the U.S. the “crypto capital of the world.” That backdrop has also made trading of more complex digital assets possible, giving Coinbase a way to grow beyond retail trading. Coinbase is trying to capture the next wave of growth in digital assets: institutional investors.
“With regulatory clarity accelerating, crypto rails are set to power more and more of global GDP for trading, payments in every financial service,” said Coinbase CEO Brian Armstrong in the company’s Q3 earnings call on Oct. 30.
The stakes are high. Coinbase’s revenue is projected to reach $7.34 billion in 2025, up 10.34% from 2024, and is expected to grow another 18.94% by 2026. Roughly 70% of its 2025 revenue – about $5.13 billion — is expected to come from transaction fees, mostly from volatile U.S. trading. Robinhood’s 2025 revenue is projected at $5.39 billion, despite its zero-fee trading model. Meanwhile, other crypto trading companies like Bullish and Gemini are preparing to go public and capture larger market shares.
By Zhenjia Zhang, Get data, Created with Google Sheets
Competitor pressure and the $2.9 billion acquisition deal with Deribit, a huge expenditure, drove net income down 13% compared to last year, to drop a further 12.7% by the end of 2026, indicating that the markets still need time to react to Coinbase’s new investment.
Coinbase’s global move comes as the company looks for ways to reduce its reliance on volatile U.S. trading. To generate steadier income, Coinbase has been investing in institutional products, custody services and overseas markets.
“They do take certain risks, like making loans to institutional customers,” said Patrick Moley, an analyst from Piper Sandler & Co., a New York-based multinational financial firm. “But in some ways, they have a very strong balance sheet. They have a lot of cash.”
Coinbase published its latest earnings report on Oct. 30. Total revenue rose 54.5% to $1.87 billion, from $1.21 billion in the same quarter last year, beating Bloomberg consensus estimates of $1.8 billion. Net income rose to $432.6 million, or $1.50 per share, from $75.5 million, or 28 cents per share, a year ago. Earnings topped the Bloomberg Consensus estimate of $1.16 per share.
By Zhenjia Zhang, Get data, Created with Google Sheets
By Zhenjia Zhang, Get data, Created with Google Sheets
The deal gives Coinbase access to Deribit’s global client market, especially Europe, where adoption of crypto has accelerated significantly since 2024. Deribit offers a full spectrum of trading products, from spot, futures, perpetuals, and options to tokenized assets. It hit record-high trading volume of more than $185 billion in July, driven by a surge in institutional flows and a boiling crypto options market.
“By bringing these products to trade all under one umbrella will be able to grow overall trading volume on all of our products on our platform,” said Coinbase CFO Alesia Haas in the Q3 earnings call. Coinbase did not respond to a request for comment.
Coinbase stock has gained 20% year to date, outpacing the broader S&P 500 Index.
“The options market for digital assets is growing, especially with institutional investors,” said Vafi, adding that Coinbase remains the gold standard in crypto trading, especially for traditional financial institutions looking to move into the digital assets market. “There still are not very many players that are providing options trading at this point. So, they do have a good competitive position right now.”
In the latest earnings call, Coinbase COO Emilie Choi said, “We’re always on the lookout, and when we think – we always look at buy, build, partner, invest, and then determine which is the right vehicle for us at that moment.”