Major cryptocurrency exchange bolsters stake in Ethena with strategic open-market acquisition, paving way for collaborative initiative

Coinbase Ventures said Tuesday it has invested in Ethena after purchasing $ENA tokens on the open market.

Ethena said the two companies have also become partners "to grow onchain finance and savings products." Coinbase mentioned a "closer partnership" that included Circle's $USDC stablecoin, according to a social media post.

$ENA jumped in price following the announcement, up about 6% during the past 24 hours, according to The Block price page.

It's unclear how Ethena and Coinbase will collaborate around $USDC, the second-largest stablecoin by total supply. Ethena is issuer of the $USDe “synthetic dollar,” which is designed to hold its peg by pairing dollar assets with delta-hedged crypto exposure via perpetual futures.

"Excited to partner with Coinbase for the first time to support their dollar savings products. The upcoming integration next week will be the first time Ethena products are available for their 100m+ user base," Ethena founder Guy Young posted to X. "Given the evolving nature of the Clarity Act, we expect further potential tailwinds for onchain native products like $USDe from idle balances on exchanges, and Ethena is well-positioned to support this transition."

The Clarity Act, which is crypto market structure legislation stalled in Congress, will likely better define whether or not platforms like Coinbase can reward users for holding funds in stablecoins like $USDC. The powerful banking lobby has been opposing measures that would allow for stablecoin incentives similar to how banks pay interest on savings account deposits.

In $USDe's case, the synthetic dollar recently lost significant market cap and has been experiencing sustained outflows since late last year.

The synthetic dollar debuted in early 2024 as a sort of onchain bond that maintained its peg to the dollar using a "delta-neutral" hedging strategy, making it unlike all other stablecoins. The project attracted support from investors like Arthur Hayes' family office Maelstrom and venture firm Dragonfly. Brevan Howard and Franklin Templeton also invested.

YZi Labs, the crypto investment firm backed by Binance founder Changpeng Zhao, which is also an investor in Ethena, increased its stake last September.