Cobie's X post
The same week, reports emerged that FalconX, a prime broker, is buying 21Shares, a major crypto ETP issuer, for an undisclosed sum. On the surface, these deals look unrelated. A community fundraising platform and an institutional infrastructure provider serve completely different markets.
But the similarity isn't in what they do. It's in the timing.
Right now, crypto firms are buying anything that generates revenue and fills a gap in their value chain. From token issuance to derivatives to prime brokerage, the message is clear: build the full stack, or acquire an existing operation that completes it. This is consolidation season.
The pattern looks familiar because we’ve seen it before. In 2007, CME Group (CME) acquired the Chicago Board of Trade (CBOT) for $8 billion. That same year, Intercontinental Exchange (ICE) made a competing $9.9 billion bid but lost. In 2008, CME added the New York Mercantile Exchange (NYMEX) for $8.9 billion. By 2013, ICE had acquired NYSE Euronext (NYSE) for $11 billion.
What unlocked that wave of M&A? Regulatory clarity. After years of fragmentation, exchanges knew the rules and could plan multi-year strategies. Winners consolidated. Smaller players either got absorbed or disappeared. The survivors became full-stack infrastructure providers serving every part of the value chain. Eighteen years later, crypto is running the same playbook.
The numbers
Q2 2025 saw 78 M&A transactions in crypto, the highest on record. Total deal value for the year has hit $8.2 billion, nearly triple all of 2024. The largest deals tell the story:
- Coinbase bought Deribit, the leading crypto options exchange, for $2.9 billion in May
- Ripple acquired Hidden Road, a multi-asset prime broker, for $1.25 billion in April
- Kraken purchased NinjaTrader, a futures and equities platform, for $1.5 billion in April
- Stripe acquired Bridge, a stablecoin infrastructure provider, for $1.1 billion in February
Compare that to 2024, when M&A activity was muted. Companies sat on the sidelines, uncertain about regulation and unwilling to pay inflated valuations left over from 2021. In 2021, there was barely any M&A at all. Everyone was raising venture capital at sky-high valuations. Why sell when you could raise at a billion-dollar valuation with zero revenue?
Now, buyers want cash flow. Sellers have it. And regulatory clarity is making deals possible.
Three types of deals
The M&A activity breaks down into three clear categories: full-stack integration, bridges to traditional finance, and profitable businesses that fill a niche. Each tells a different part of the same story.
Full-stack integration: Coinbase becomes the Goldman Sachs of crypto
Coinbase has made eight acquisitions in 2025, systematically buying every piece of the crypto lifecycle.
- Upstream (token issuance): Echo ($375 million) for community-driven fundraising and LiquiFi for token management.
- Midstream (trading and derivatives): Deribit ($2.9 billion), the global leader in crypto options with $30 billion in open interest and $1 trillion in annual volume.
- Downstream (advertising and infrastructure): Spindl for blockchain advertising, plus the Iron Fish and Roam teams for privacy and search infrastructure.
The analogy to investment banking is almost exact. Goldman Sachs doesn't just trade securities. It underwrites IPOs (upstream), trades and clears them (midstream), and provides research and custody (downstream). Coinbase is building the same model for crypto.
Deribit alone shows the scale of ambition. It's the world's largest crypto options platform with a "consistent track record of generating positive Adjusted EBITDA" as disclosed by Coinbase. Unlike speculative acquisitions in 2021, Coinbase is buying profitable, revenue-generating businesses that immediately add to the bottom line.
Bridge to TradFi: Ripple buys a prime broker
Ripple's acquisition of Hidden Road marks a different kind of consolidation. Hidden Road is a multi-asset prime broker that happens to clear crypto alongside FX, derivatives, fixed income, and swaps.
Hidden Road clears over $3 trillion annually across all markets. It has 300+ institutional clients, many of them hedge funds and asset managers that have never touched crypto. In April, it secured a FINRA broker-dealer license, giving it regulatory approval to expand into US fixed income markets.
Ripple is buying Hidden Road to become a traditional financial infrastructure provider that also does crypto, and the distinction matters because it shows that ‘the crypto rails’ are valuable - even if it's just from a cost-out basis.
Hidden Road will use Ripple's RLUSD stablecoin as collateral across its prime brokerage products and migrate its post-trade activity to the XRP Ledger. That's the wedge. Ripple is positioning RLUSD as the first stablecoin to enable efficient cross-margining between digital assets and traditional markets.
CEO Brad Garlinghouse framed the deal as addressing institutional demand: "We are at an inflection point for the next phase of digital asset adoption - the US market is effectively open for the first time due to the regulatory overhang of the former SEC coming to an end, and the market is maturing to address the needs of traditional finance."
Translation: crypto companies are no longer staying in their lane. They're buying traditional financial infrastructure and integrating it with blockchain rails.
Why now? The regulatory unlock
The catalyst for all of this is regulation. Specifically, the shift from hostility to clarity.
Under the Biden administration, crypto firms faced Operation Chokepoint 2.0, an informal campaign to cut crypto companies off from banking services. The SEC under Gary Gensler pursued aggressive enforcement actions. Companies couldn't plan. Every deal carried regulatory risk. M&A ground to a halt.
Trump's election in November 2024 changed the calculus. His administration signalled support for crypto, including an executive order allowing crypto in 401(k) plans and the appointment of Paul Atkins, a known crypto advocate, as SEC chair. The SEC's "Project Crypto" initiative and the GENIUS Act on stablecoins have established clearer operating frameworks. Another important step toward regulatory clarity is the Clarity Act - market structure legislation currently progressing through Congress with a reasonable degree of bipartisan engagement. This comes alongside more coordinated and constructive engagement between federal regulators, including the SEC, CFTC, OCC, and FDIC.
This mirrors 2007 in traditional markets. CME and ICE weren't just competing for acquisitions. They were responding to a regulatory environment that allowed them to plan multi-year strategies. Regulatory clarity doesn't just permit M&A. It accelerates it.
What this means
Crypto consolidation has strong similarities to previous Tradfi M&A seasons, and it’s a signal of institutional infrastructure buildout.
In 2021, the cycle was driven by speculation. In 2024, the cycle stalled. In 2025, the cycle is driven by profitability and consolidation. Acquirers are paying premium multiples for businesses with real cash flow.
The winners in crypto will be the firms that own the entire stack. The losers will be the ones who stay niche. History doesn't repeat, but it rhymes. |
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