Home 42% of Coinbase assets in 2022 are in Bitcoin
Finance News

42% of Coinbase assets in 2022 are in Bitcoin

Edith Muthoni Freelance Writer Author expertise
Fact Checked
Fact Checked
Everything you read on our site is provided by expert writers who have many years of experience in the financial markets and have written for other top financial publications. Every piece of information here is fact-checked. We sometimes use affiliate links in our content, when clicking on those we might receive a commission - at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy.
We do our best to help you make intelligent financial decisions. Tradingplatforms.com is compensated if you access certain products or services offered by eToro USA LLC and/or eToro USA Securities Inc. and other brokerage companies. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success. This however does not affect our assessments of the brokers, their features, and their overall rating.

TradingPlatforms has been studying Coinbase’s 2022 financial results, highlighting the proportion of cryptocurrencies making its assets. It concludes that  42% of the crypto exchange’s assets are in Bitcoin (BTC). That’s a slight increase from Q4 2021, when 40% of assets were in the crypto. Likewise, Ethereum makes up 24% of the firm’s assets, while other cryptos account for 31%.

TradingPlatforms’ financial lead Edith Reads has been sharing her thoughts on the data. She affirms, “Coinbase has always held Bitcoin and other cryptos since inception. It has done so driven by its firm belief in BTC’s and the cryptoeconomy’s long-term potential.”

Coinbase’s total assets amounted to $256 billion in the period. That figure was a $22 billion decline from its Q4 2021 total of $278 billion. The firm attributes that drop to a fall in the prices of crypto assets. That said, net inflows amounting to billions of dollars cushioned it from bigger losses.

Coinbase’s Declining Market Share

As the overall market capitalization of crypto assets declined in Q4, Coinbase saw a corresponding decline in its market share. But, the decrease was more pronounced for assets highly represented on its platform, such as ETH and SOL. As a result, Coinbase believes that this reflects market conditions and is not a sign of its weakness. 

The crypto exchange’s transaction revenue also took a hit in Q1, falling 56% compared to Q4. However, though transaction revenue dipped, it still made up most of Coinbase’s quarterly net earnings. In total, it brought in $1.2 billion, of which $1.0 billion was income from transactions and $152 million was from subscriptions and services. 

Additionally, retail transaction revenue ($966M) was down 56% from Q42021. Notwithstanding that, there was an improvement in its average retail fee rate, thanks to increased consumer activity on the platform. 

Again, transaction revenue from institutional investors was $47 million in Q1, down 48% from Q4. The main driver of this decline was a change in the fee structure for market makers, which accounted for the vast majority of Coinbase’s institutional volume.

Coinbase is Optimistic of a Bright Future

Despite declining transaction revenue, Coinbase is seeing continued growth in its user base and merchant adoption. This suggests that there is still strong demand for cryptocurrency payments and that Coinbase is well-positioned to capitalize on this demand.

The new fee structure caused a significant decline in Coinbase’s institutional fee rate. But the firm continued to see strong demand from market makers. In addition, it recorded a slight improvement in its retail trading activity. That uptick helped to offset some of the losses in institutional volume.

Another bright spot was that the exchange attracted increased participation in staking. That led to more staking of native assets across each asset that the platform supports.  Coinbase remains confident in its long-term growth prospects following these developments. It focuses on expanding its product offerings and geographical reach to push crypto adoption.

Edith Muthoni Freelance Writer

Edith Muthoni Freelance Writer

Edith is a dynamic and seasoned finance writer with a focus on crypto and trading - featured on different platforms, including Cryptopolitan.com, Insidebitcoins.com, and Learnbonds.com. With a Bachelor's Degree in Actuarial Science from Strathmore School of Business, Edith combines her education and experience to analyze complex market trends. This solid foundation also enables her to simplify complex trading strategies, delivering informative content, relevant to our fast-paced economy.

Edith's passion for finance and cryptocurrency keeps her at the forefront of industry news. She creates content that empowers her readers. She’s also a personal finance coach, providing expert advice on trading and other intricate finance issues