Coinbase's $375 Million Echo Deal Is Part of an Acquisition Spree. Here's What Investors Need to Know.

Coinbase (NASDAQ: COIN) is making a multi-pronged effort to diversify its revenue streams. One part of that is its recent $375 million acquisition of Echo, which the Wall Street Journal says is its eighth deal this year. Trading revenues can ebb and flow depending on the market. As a result, Coinbase's price tends to rise and fall in tandem with Bitcoin (CRYPTO: BTC).

Other 2025 acquisitions include BUX, a Cyprus-based contracts for difference (CFD) firm; Spindl, an on-chain ad company; Deribit, a global crypto derivatives platform; and LiquiFi, a token management platform.The deals all point to Coinbase expanding its services and reducing its reliance on cryptocurrency trading revenue.

What is Echo?

Echo is a platform where early-stage Web3 companies can raise capital directly. Echo says it has raised $200 million for over 300 projects since its launch last year. It utilizes blockchain smart contracts to handle the funds, check investor eligibility, and ensure compliance requirements are met. It aims to support and bring more unity to angel investment in crypto projects.

Image source: Coinbase.

Qualified investors -- those who meet certain income or asset requirements -- can invest privately through investment groups on a project-by-project basis. Its Sonar product is a public platform where projects host their own sales. Coinbase plans to integrate Sonar into its product mix and keep Echo as a stand-alone product.

The $375 million Echo acquisition allows it to deepen its offer to both groups -- giving developers a way to raise funds on-chain while giving investors access to early stage companies.It fits well with Coinbase's July acquisition of LiquiFi. LiquiFi specializes in token distribution and vesting, enabling Coinbase to support early stage crypto projects throughout their lifecycles. Crypto entrepreneurs can now build their projects and access capital in the same place.

What the Echo acquisition means for investors

Coinbase's position as a leading cryptocurrency exchange that also has a blockchain with a strong developer community gives it one foot in both camps. Projects built on its Base network could eventually connect with Coinbase's 8.7 million-plus monthly transacting investors.

Coinbase stock has gained around 15% year-to-date, almost on a par with the S&P 500. Its performance continues to be volatile and heavily impacted by cryptocurrency prices. In April, when Bitcoin's price plummeted as investors reacted to tariff fears, so did Coinbase. Similarly, the stock's recent peaks reflect optimism in the crypto market.

Transaction fees made up about 50% of Coinbase revenues in Q3 2025. That's lower than previous quarters, but the firm is still heavily dependent on crypto trading. Its efforts to position itself as a one-stop shop for everything blockchain-related could be beneficial for long-term investors, as long as it doesn't stretch too far.

Here's what the Echo and other deals could mean for Coinbase's stakeholders:

• Investors: Coinbase is expanding its U.S. offerings to include perpetual futures and potentially -- if it gets an SEC green light -- tokenized stocks. Echo could allow certain customers to invest in early-stage crypto companies. Deribit makes Coinbase a major player in crypto derivatives.
• Developers: Coinbase's Base network is the sixth-biggest chain in terms of total value locked (TVL), the amount of funds tied up in apps on its ecosystem. Per DefiLlama, it has almost $5 billion in TVL and over 750 protocols. Being able to raise capital, manage equity issuance, and even access on-chain advertising all add to Base's appeal.
• Stablecoin and tokenization partnerships: Interest in stablecoins and real-world asset (RWA) tokenization is soaring right now. Financial institutions and payment providers want to integrate blockchain into their operations. And Coinbase is positioning itself as their partner in that process. Coinbase says Echo's infrastructure will support Coinbase's tokenization work. It had also been in acquisition talks with stablecoin start-up BVNK, but these didn't pan out.

What's next for Coinbase?

Blockchain technology is becoming more mainstream, and a pro-crypto mood in Washington could be the tipping point for the industry. Even so, it is early days and while, for example, a surge in stablecoin usage looks likely, it isn't clear what shape it will take and which cryptocurrencies and crypto companies will benefit.

Coinbase is working hard to ensure it succeeds no matter what direction the market goes. The leading crypto brand is covering all its bases by supporting early-stage blockchain projects, major financial institutions, and everything in between. Its Echo acquisition is one part of this. However, Coinbase faces headwinds in the form of increased competition, regulation, and a potential rise in risk-off sentiment.

If you're considering adding Coinbase to your portfolio, the real question is whether you think financial services will increasingly move on-chain. If you do, and are comfortable with the risks involved, buying Coinbase could be a way to get crypto exposure without picking specific projects.

Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.