Crypto Currents: Coinbase to acquire Deribit for $2.9B

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

COINBASE TO ACQUIRE DERIBIT FOR $2.9B: On Thursday, Coinbase (COIN) announced it has entered into an agreement to acquire Deribit, a leading crypto options exchange with approximately $30B of current open interest. Coinbase is acquiring Deribit for approximately $2.9B, comprised of $700M in cash and 11M shares of Coinbase Class A common stock, subject to customary purchase price adjustments.  This transaction is subject to regulatory approvals and other customary closing conditions and is expected to close by year-end.

The company said, “This strategic acquisition significantly advances Coinbase’s derivatives business, establishing us as the premier global platform for crypto derivatives…Deribit is the global leader in crypto options. Deribit’s robust options platform complements Coinbase’s rapidly growing US futures and international perpetual futures businesses, completing our derivatives offering. This is an important step toward our goal of providing traders access to spot, futures, perpetual futures, and options trading – all in one seamless, capital-efficient platform.”

Additionally on Thursday, Coinbase reported first quarter adjusted earnings per share of $1.94 on revenue of $2.03B, which compared to adjusted EPS of $2.53 for the same period last year and analyst revenue estimates of $2.09B.

The company said, “We delivered strong financial results in Q1, generating $2B in total revenue, $66M in net income, $527M in adjusted net income and $930M in Adjusted EBITDA. Total transaction revenue was $1.3B and subscription and services revenue was nearly $700M driven by growth in stablecoin revenue and Coinbase One. With $9.9B in total $USD resources, we are well-positioned to drive further innovation and long-term growth…In April, we generated approximately $240M of total transaction revenue. We expect Q2 subscription and services revenue to be within $600-$680M, as we anticipate Q/Q growth in stablecoin revenue to be more than offset by a decline in blockchain rewards revenue due to lower asset prices. We expect Q2 transaction expenses to be in the mid-teens as a percent of net revenue. We expect technology & development and general & administrative expenses to range from $700-$750M. Finally, we expect sales & marketing expenses to be in the range of $215-$315M, driven by potential variability in performance marketing and customer USDC balances in Coinbase products, which drive USDC rewards.”

Following the report, Keefe Bruyette raised the firm’s price target on Coinbase to $205 from $183 and kept a Market Perform rating on the shares. The revenue miss was slightly offset by lower operating expenses, though adjusted EBITDA of $930M still fell short of the firm’s estimates, the analyst said. Coinbase noted that Deribit has historically generated positive EBITDA and should immediately enhance profitability.

Meanwhile, JPMorgan lowered the firm’s price target on Coinbase to $215 from $276 and kept a Neutral rating on the shares. The firm said a more challenging environment “plagued” the company’s Q1 results with Q2 starting slowly. The results fell short of expectations as trading shifted more towards lower fee institutional and some commission compression driven by mix and institutional rebates in derivatives, the analyst said. JPMorgan noted the more challenging transaction environment takes a “big chunk” out of its forward earnings projections.

Piper Sandler raised the firm’s price target on Coinbase to $190 from $180 and kept a Neutral rating on the shares. The firm noted the company reported in-line revenues and adjusted EPS above its estimate. The company also announced the planned acquisition of Deribit. While Piper believes this deal has potential to significantly expand both Coinbase’s derivatives business and global presence, it would note that Deribit currently does not offer any derivative products that are regulatory compliant in the U.S.

CRYPTO FIRMS REPORT QUARTERLY RESULTS: On Thursday, Hut 8 (HUT) reported a Q1 loss per share of ($1.30) on revenue of $21.8M, which compared to analyst estimates of a loss per share of ($1.40) on revenue of $30.05M. The company expanded bitcoin held in reserve to 10,264 bitcoin with a market value of $847.2M as of March 31.

“The first quarter of 2025 marked significant advances in Hut 8’s evolution as an integrated energy infrastructure platform,” said Asher Genoot, CEO. “As reflected in our results, the first quarter was a deliberate and necessary phase of investment. We believe the returns on this work will become increasingly visible in the quarters ahead. Following a period of disciplined investment and execution, including a major upgrade of our ASIC fleet, we launched American Bitcoin, a majority-owned subsidiary of Hut 8 focused exclusively on industrial-scale bitcoin mining and strategic bitcoin accumulation. The streamlined capital allocation framework made possible by the American Bitcoin launch reinforces our ability to scale lower-cost-of-capital businesses such as high-performance computing. With approximately 10,800 megawatts of development capacity in our pipeline and 10,264 bitcoin retained in reserve as of March 31, 2025, we believe we are well-positioned and capitalized for disciplined growth. And through our ownership in American Bitcoin, we have preserved exposure to bitcoin while establishing a new vehicle purpose-built for shareholder value creation.”

CleanSpark (CLSK) also reported earnings on Thursday with a Q2 loss per share of (49c) on revenue of $181.7M, which compared to EPS of 59c for the same period last year and analyst revenue consensus of $186.55M. The company held $979.6M in bitcoin on its balance sheet as of March 31.

“This was a quarter defined by discipline, scale, and continued strategic clarity,” said Zach Bradford, CEO. “As other players shift direction or decelerate growth, CleanSpark has doubled down on being the only remaining pure-play, public bitcoin miner. We believe that focus matters now more than ever, and we remain on track to reach our 50 EH/s target during June, all while growing our bitcoin treasury, strengthening the balance sheet, and prioritizing long-term stockholder value.”

Additionally on Thursday, MARA Holdings (MARA) reported a Q1 loss per share of ($1.55) on revenue of $213.9M, which compared to EPS of $1.26 last year and analyst revenue estimates of $217.59M. At March 31, the company held 47,531 bitcoin and combined unrestricted cash, cash equivalents and bitcoin of $4.1B.

CEO Fred Thiel said, “2025 is an important year for MARA as we transform into a vertically integrated digital energy and infrastructure company.  In Q1, we took steps to further progress with our vertically integrated model. We reduced costs and demonstrated we can design, build, and operate efficient infrastructure powered by self-owned energy. Additionally, we executed across both of our strategic priorities: growing with discipline while improving capital and operational efficiency, and investing in research and development to extend our technological capabilities. We believe that staying steadfast to our strategy will, in time, lead to greater value creation for our shareholders.”

MORE CRYPTO EARNINGS: TeraWulf (WULF) reported Q1 results Thursday with a loss per share of (16c) on revenue of $34.4M, which compared to analyst consensus of a loss per share of (9c) on revenue of $41.25M. As of March 31, the company held $219.6M in cash and cash equivalents and bitcoin.

“TeraWulf continues to advance its strategy of developing scalable, sustainable infrastructure for both Bitcoin mining and high-performance computing. As outlined during our fourth quarter 2024 earnings call, our key priorities for 2025 include energizing Miner Building 5 and deploying our upgraded mining fleet, delivering Core42’s contracted 72.5 MW of HPC capacity on schedule, securing financing for our initial HPC data center buildout, and signing additional customers to reach between 200 and 250 megawatts of contracted HPC capacity by the end of 2026,” said Paul Prager, CEO.  “We’ve made meaningful progress on each of these fronts. In late Q1 and early Q2, we energized Miner Building 5, bringing total capacity at Lake Mariner to 245 MW. We remain on track to deliver the Core42 deployment this year and have initiated the financing process to support our next phase of HPC growth.”

On Wednesday, Core Scientific (CORZ) reported Q1 EPS of $1.25 on revenue of $79.53M, which compared to an EPS of 78c last year and analyst revenue estimates of $85.18M.

“This quarter marks an inflection point for Core Scientific. In a matter of months, we have transformed vision into execution, delivering infrastructure at scale and positioning ourselves at the center of one of the most important shifts in modern computing. The pace of demand for high-performance data infrastructure is accelerating, and our ability to move with speed and precision is setting us apart. We are not just expanding capacity; we are shaping the foundation for the next era of data center infrastructure,” said Adam Sullivan, CEO.

CANAAN INITIATED WITH BUY: Benchmark initiated coverage of Canaan (CAN) on Tuesday with a Buy rating and $3 price target. Canaan’s vertically integrated approach differentiates it within the bitcoin mining space, while positioning it to capitalize on both chip and rig sales and proprietary mining revenues, saif the analyst, who believes the company’s ADRs are “very inexpensive.” The firm expects the share price to appreciate as the company executes on its strategy, with a potential tailwind coming from the rising price of bitcoin, the analyst added.

CELSIUS FOUNDER SENTENCED TO 12 YEARS: On Thursday, Jay Clayton, the United States Attorney for the Southern District of New York, announced that Alexander Mashinsky, the founder and former CEO of Celsius Network, was sentenced to 12 years for committing commodities fraud and securities fraud at Celsius.  Mashinsky previously pled guilty on December 3, before U.S. District Judge John Koeltl, who imposed the sentence. According to the allegations contained in the Indictment and statements made in public filings and court proceedings, Mashinsky and others orchestrated a yearslong scheme to mislead customers about Celsius’s proprietary crypto token CEL.  They manipulated CEL’s price by spending hundreds of millions purchasing it on the open market to artificially inflate its value.  At times, they used customer deposits to fund these market purchases, without disclosing that to customers.  Without aggressive manipulation, CEL’s price would have been significantly lower.  In addition to the prison term, Mashinsky was sentenced to three years of supervised release and ordered to pay a $50,000 fine and forfeiture of $48,393,446.

Clayton said, “Alexander Mashinsky targeted retail investors with promises that he would keep their ‘digital assets’ safer than a bank, when in fact he used those assets to place risky bets and to line his own pockets.  In the end, Mashinsky made tens of millions of dollars while his customers lost billions.  America’s investors deserve better.  The case for tokenization and the use of digital assets is strong but it is not a license to deceive.  The rules against fraud still apply, and the SDNY will hold those who flout them accountable for their crimes.”

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific, Greenidge Generation (GREE), Mara Holdings, Strategy (MSTR), Riot Platforms (RIOT) and TeraWulf.

PRICE ACTION: As of time of writing, bitcoin rose roughly 6% this week to $103,197 in U.S. dollars, according to CoinDesk.