Leading cryptocurrency exchange platform Coinbase sold 12,652 ETH (approximately $25 million at current rates) in Q4 2024, amid a valuation nearly double its current level. Explore further details on these transactions.
One of the largest cryptocurrency exchanges, Coinbase, sold 12,652 ETH (approximately $25 million at the current price) in the fourth quarter of 2024, when the company’s valuation was nearly double its current level. This was revealed by Geoffrey Kendrick, Global Head of Digital Asset Research at Standard Chartered Bank.
Based on Coinbase’s quarterly results analysis, Kendrick estimates that nearly 80% of revenues generated by Base, the platform’s Ethereum Layer 2, translate into profits. According to him, the company strategically carried out these ether sales by net buying in the third quarter when the price was lower and then reselling in the fourth quarter when the price reached $4,000.
“The fact that they net bought in Q3 (when prices were low on average) and net sold in Q4 (when prices were higher on average) shows that Coinbase is acting like any risk-adjusted profit maximizer would,” Kendrick said in his note.
On the other hand, Coinbase acknowledged selling some of its ether to fund its operations, without specifying the amounts involved. The company denied allegations that it regularly engages in trading activities.
“Base earns ETH from sequencer fees, and the ETH we earn is mainly held for long-term investment or used for operational expenses, including tax liabilities and reinvestment in growth through things like salaries, grants, acquisitions, and funding for public goods,” a Coinbase spokesperson said.
According to Kendrick’s calculations, Coinbase’s net ETH sales over the last three quarters amount to 1,558 units, suggesting a strategic selling model rather than long-term accumulation. However, Coinbase asserted that its ETH holdings for investment purposes had grown by 20% over the entire year 2024.
While Coinbase claims that these sales were primarily aimed at financing its activities, it raises questions about its crypto asset management strategy. Binance faced similar accusations in January and February this year.
In conclusion, it is worth noting that Coinbase leads in ETH staking, as indicated in their latest report. The exchange contributes around 11.35% of the total staked ETH, positioning it as one of the major players in the Ethereum ecosystem.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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