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Coinbase eyes EU acquisition for derivatives

Illustration of golden coins with the Coinbase logo on them

Illustration: Sarah Grillo/Axios

Coinbase plans to expand its product offerings in Europe to include derivatives through the acquisition of an unnamed holding company, it announced late Friday.

Why it matters: In a hunt for growth, U.S.-based crypto firms are looking to Europe for new product offerings.

Details: The crypto exchange has agreed to acquire a Cyprus-based entity that holds an EU Markets in Financial Instruments Directive (MiFID) license, according to the company's blog post.

  • Through the acquisition, Coinbase says it will be able to offer crypto derivatives products — like futures, options and perpetual swaps — to eligible customers in selected EU countries.
  • The deal is subject to regulatory approval, but Coinbase expects it will close this year.

Between the lines: Derivatives make up more than 75% of the global crypto market, according to Coinbase, meaning the acquisition could unlock a huge revenue stream for the exchange in Europe.

  • Still, it has a long way to go before catching up with more established players like Binance, Bybit, OKX and Deribit.

Flashback: The firm began offering derivatives to institutional users in eligible non-U.S. jurisdictions through the launch of its Coinbase International Exchange last May.

  • In August it won approval from the National Futures Association to offer crypto derivatives products to retail users within the U.S.

Of note: Prior to this deal, Coinbase reportedly had pursued an acquisition of FTX Europe to offer derivatives in Europe.

State of play: Coinbase isn't alone in looking to offer new crypto products in Europe to drive growth.

  • In December, Robinhood announced plans to launch its own crypto exchange on the continent, including 25 tokens (as opposed to 15 in the U.S.) and differentiated products that aren't available in its home market.
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