💵 Big spender

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Gm!

It’s a holiday in the US, but I have some thoughts on Coinbase and CEO Brian Armstrong’s comments about M&A activity, so we’re going to have another M&A Monday!

Keep in mind, Coinbase has been busy on the M&A front, even before they coughed up billions for Deribit. 

Sheraz Ahmed, managing partner at STORM Partners, told me that the acquisitions — and potential futures buys — “signal a shift.”

“We’re moving from a fragmented ecosystem to one where a few dominant players are absorbing the best tech. That brings legitimacy, sure, but it also raises questions about decentralization,” he added.

But I digress. Let’s take a closer look at Coinbase…

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🙆 One big circle

“We are looking at acquisition opportunities, doesn’t mean we swing at every pitch,” Armstrong told Bloomberg earlier this month. He was careful to add that it doesn’t mean that they’re going to be interested in every opportunity, however.

One of the biggest potential targets is obviously Circle, especially now that there have been multiple reports that firms including Ripple are interested in the stablecoin issuer. Coinbase and Circle obviously have a pretty close working relationship, so it would make sense that if Circle were to sell itself, Coinbase might be one of the top contenders to buy it. 

“I definitely believe that Coinbase will go after Circle,” Bitwise’s Ryan Rasmussen told me because of the “attractive opportunity” that Circle presents. Coinbase has roughly $9 billion in cash, he noted, which means that the firm is ready to deploy capital.

“They already clearly leaned into USDC as the go-to stablecoin across the Base ecosystem, and really across Coinbase…You get yield on USDC just for holding it in your account. So I think from an issuer perspective, it makes a lot of sense.”

A bid for the stablecoin issuer goes towards a larger goal that both he and Bitwise think Coinbase has: becoming the Amazon of crypto. 

“When you look at it through that lens, it opens up a wide range of ideas…stablecoin issuers like Circle [are] certainly an obvious target for them, and we'll think they'll be pursuing that. But I think their vision of growing beyond crypto financial services opens up a whole new world, like developer tooling, companies like Alchemy, for instance, that could help grow their Coinbase Cloud or apps being built on Base,” Rasmussen said. 

He could also see Coinbase mulling a bid for RWA platform Securitize and making an AML/KYC play with Chainalysis. But if Coinbase wants to zero in on the onchain economy, then he could see Alchemy becoming a target for them. 

“If you look at where Coinbase is heading, it’s pretty clear they’re building a vertically integrated crypto empire. They’re not just interested in trading volume — they want infrastructure, compliance, and reach. I’d expect them to go after targets that give them regulatory licenses, especially in MiCA-aligned jurisdictions, or firms that can plug into Base and deepen their layer-2 or DePIN exposure,” Ahmed said. 

“Custody, analytics, and wallet infrastructure are all in scope. It’s less about acquiring hype, more about securing long-term dominance.”

However, Rasmussen’s skeptical that Coinbase would consider a different stablecoin issuer if Circle’s off the table. Instead, he’d expect them to go after a firm in the payment and service provider segment of stablecoins. 

“If they can't get Circle as an issuer, I do think it makes sense to go after the next layer, which is that payment and service provider space as it relates to Coinbase or to stablecoins. And they have things like Coinbase commerce, for instance, which stablecoins integrate into and make it easy for consumers and businesses to interact with each other using stablecoins,” Rasmussen said.

Once Coinbase figures out the stablecoin category, Rasmussen expects the firm to switch over to focusing on tokenization and looking for acquisition targets there. As I mentioned above, one of the most attractive targets in that specific sector is Securitize. 

“We’ve seen, with their acquisition of Deribit, they’re prepared to go after the sector leaders,” he said. “It’s the most attractive candidate to immediately add value.”

What other sector leaders would top your list if you had billions to spend in crypto?