Coinbase Global Inc. is currently in advanced talks for the potential acquisition of crypto derivatives exchange Deribit, according to individuals familiar with the matter. The companies have informed Dubai regulators about the negotiations, as Deribit possesses a license there that would transfer to any acquiring entity. Deribit is recognized as the primary trading platform for Bitcoin and Ether options globally, while Coinbase stands as the largest US-based cryptocurrency exchange, as reported by data platform Kaiko.

The finalization of an agreement between Coinbase and Deribit remains uncertain, even though Bloomberg had previously estimated Deribit's valuation to be between $4 billion and $5 billion. Discussions may not necessarily result in a transaction, and those familiar with the situation have chosen to remain anonymous to maintain the confidentiality of the negotiations.

Both Coinbase and Deribit have refrained from commenting on the potential deal. If materialized, the acquisition of Deribit would be considered a significant milestone in the history of the industry. The talks coincide with the resurgence of deal-making activities following Donald Trump's return to the White House, where he has supported the adoption of cryptocurrency by appointing advocates to key governmental roles and implementing policies favorable to the industry, including the establishment of a Bitcoin reserve.

Kraken, a competitor of Coinbase, recently announced its acquisition of retail futures trading platform NinjaTrader for $1.5 billion. This deal facilitates Kraken's entrance into offering crypto futures and derivatives in the US for the first time. Kraken is also reportedly preparing for an initial public offering as early as the first quarter of next year.

For Coinbase, an acquisition of Deribit represents a bold move into the profitable cryptocurrency derivatives market. Options are particularly popular in this asset class due to their ability to provide traders with the right to buy or sell assets at predetermined prices by specific deadlines without the obligation to execute the trade, enabling investors to manage their risk exposure across various investments.

Last year, trading volumes on Deribit, which includes options, futures, and spot trading, nearly doubled to almost $1.2 trillion according to the company's data. While Coinbase has been more focused on spot trading historically, it does offer derivatives services outside the US through a Bermuda-based platform launched in 2023. The exchange recently reported a significant increase in revenue and profits in the fourth quarter, driven by a resurgence of retail investors who re-entered the market after the previous downturn.