The statistics for the fourth quarter of 2022 and the whole year were recently disclosed by Coinbase, the top cryptocurrency exchange, and custodian. After-hours trading fell 2.2% as a result of the findings, which made investors wonder what this portends for the company’s future prospects. Prior to the publication of these statistics, we’ll look more closely at Coinbase’s revenue mix, consumer activity, and fee take rate in this blog post.
In Q4 2022, Coinbase reported sales of $1.28 billion, up from $190 million in Q3 and $585 million in Q2 of 2021. This rapid expansion was attributable to greater trading volumes, fees for servicing retail consumers, and institutional acquisitions of crypto assets. Moreover, Coinbase reported that its income for the entire year of 2022 increased by an astonishing 300% from that of 2020, reaching $12 billion.
Before the publication of its financial results, Coinbase claimed a 53% increase in monthly transactional users (MTUs) compared to 2020, which indicates that new consumers are still flocking to exchanges for cryptocurrencies like Coinbase. Also, during Q4, the total assets stored on Coinbase reached an all-time high of $223 billion, showing that more users than ever are entrusting Coinbase with their crypto assets. This is primarily because of Coinbase’s reputation for security and dependability.
When the company releases its financial results, investors will likely be particularly interested in learning Coinbase’s fee take rate—more specifically, how much it charges users for trading activities on its platform in comparison to other exchanges. Data from CryptoCompare shows that Coinbase had an average taker fee rate of 0.30%, which was lower than both Kraken (0.35%) and Gemini (0.50%) when comparing taker fees charged by major US exchanges like Kraken and Gemini (excluding Binance US owing to different fee structures). This shows that there is greater than ever competition across exchanges, yet it may also result in decreased profitability for exchanges like Coinbase that have chosen to charge lower fees over higher ones like Binance US (which charges 0.50%).
Overall, it is clear that, despite some investor trepidation following the release of Coinbase’s fourth quarter and full-year financial results, there is still a lot of good news regarding their performance, including notable increases in revenues earned and strong user growth figures, making them a viable option for those looking for crypto asset trading opportunities moving forward into 2023 and beyond.