Coinbase’s Daring Attempts at Acquiring FTX Europe
In a tale reminiscent of a rollercoaster ride — complete with dramatic drops and dizzying heights — Coinbase made not one, but two attempts to scoop up FTX Europe’s operations after the crypto giant’s bankruptcy in November 2022. Despite the company’s optimistic quests for expansion, they’ve ultimately decided to pass on the deal.
The Timeline of Interest
First on the list of attempts was in November 2022, right after FTX’s epic fail. Fast forward to September 2023, and Coinbase took another swing at the deal, according to a report from Fortune. A Coinbase spokesperson chimed in, calling the process a typical part of their business strategy:
“We’re always evaluating opportunities to strategically expand our business and meet with many teams around the world.”
Other Suitors in the Mix
Coinbase isn’t the only player interested in FTX Europe’s assets. Reports indicate that other contenders include Crypto.com and Trek Labs. The deadline for the auction has been extended to September 24, leaving us all curious: who will end up taking this crypto treasure home?
The Allure of Derivatives Trading
FTX Europe wasn’t just your average crypto exchange; it was a heavyweight in the derivatives game, championing a variety of products including perpetual futures. For those not in the know, derivatives are contracts that derive their value from an underlying asset (think Bitcoin). They come in many flavors such as options, futures, and swaps. Traders love using them for hedging, leveraging, and, let’s face it, some good old speculation.
Why Derivatives Matter to Coinbase
Given the rising tide of interest in crypto derivatives, the acquisition could have ushered in not just new assets, but also a boost in Coinbase’s fee revenue stream. In its latest earnings report, Coinbase boasted a revenue of $707 million for the second quarter of 2023. However, this was a 13% decline from the previous quarter. And as for derivatives? Those volumes are soaring.
Market Trends Worth Noticing
June saw global derivatives trading on centralized exchanges hit $2.13 trillion, marking a remarkable 13.7% increase. Binance took the crown as the leader in this arena, raking in over $1.21 trillion in trading volume. Meanwhile, Bitcoin futures on the CME had an impressive spike as well, totaling around $37.9 billion, up 28.6% from the previous month.
Expanding Horizons: Coinbase’s Moves in the U.S.
Coinbase isn’t just sitting idly by while others nab opportunities; they’re also diving into the U.S. derivatives market. In August, they received the green light to offer crypto futures contracts to eligible customers through their CFTC-regulated exchange, FairX. This strategic move further cements their position in the global crypto derivatives market, which currently accounts for a whopping 75% of all crypto trading volume worldwide.
+ There are no comments
Add yours