Coinbase Acquired Deribit for $2.9 Billion. Here’s Why It Matters - Ep. 831
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Now what Coinbase offering is you can come to me. I offer spot. I offer auction. I offer futures. So that create a very like, a deeper liquidity pool that can attract traders to come to Coinbase along that I can trade spot. I can use options to hedge my spot position within CoinBase. I can also use my future position to leverage or or to hedge my spot position. So, again, this is quite technical, but what that means is it actually reduce the capital requirement for the trader. That is the incentive to move trader from other platform to coin based platform. The capital requirement thing is real
Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. We feature listener comments on every episode, and boy, did we get some hot takes on my recent show on the Ethereum pivot with Tarun Chitra and Max Reznik. On x, z k stim wrote, why you have Max the trader talking about Ethereum? Dude is on a crusade to shit on ETH. Very fair and objective take. Let's have Ethereum people talking about Solana now. Also an ex, MCF wrote, but also uniquely positioned. Who else has seen the insides of both houses? Keep the comments coming. We read every sin
a lot. Thank you for having me. So
this is the first Unchained livestream we've done in a while, as I mentioned, but, you know, this deal, between Coinbase and Deribit is just the biggest deal we've ever seen in crypto history. And you've been covering Coinbase for a while. So what was your reaction upon hearing this news?
Yeah. I think maybe three things come up when I heard about this news, in the morning. So number one, obviously, we just mentioned this is is the largest deal, m and a deal in the crypto industry. I think this is just the beginning of a wave of crypto m and a and IPO coming up. The second is this is a if you look at the structure of the deal so this is a large deal, but if you look at the structure of the deal, Coinbase Coinbase used about $700,000,000 in cash and used $2,200,000,000 in stock. So I remember during the last crypto winter, a lot of people kind of like, Coinbase was kind of ridic
Yeah. That makes a lot of sense. So we'll we'll talk a little bit more about that in a moment, but I did also wanna ask because I'm sure you're aware that before, there were a number of companies that were rumored to be trying to buy Deribit. Kraken was one. Robinhood was another. Why was it in such high demand? I
I think number one, I just mentioned because they are the dominant player in the crypto option trading. So, again, like, number 85% market shares, this is highly respectable number. And and the second point, I don't think they get enough credit. It's option is actually way more recurring than spot and futures trading. Not many people realize that if you are in the market structure space, you may notice that, you know, exchange like CBOE actually did very well in the first quarter because they focus a lot on the option trading. So from that perspective, you can tell, it not just diversify away
talk to me a little bit more about the size of the crypto derivatives market and how much bigger you think it can grow.
It's a it's a huge number. So if I look at the traditional I mean, by the way, number one is still growing. And if you look at traditional market as an example, the derivative market can be 10 x of the spot market. So let's say, you know, that, like, the the spot like, the the, the market cap of, like, the total crypto companies is, let's say, $3,000,000,000,000. And if the trading volume is, let's say, $30,000,000,000,000, it could be, li
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