Coinbase's Q4 earnings are due on Feb. 15. Investors will want to keep a close eye on any plans laid out for fees charged on Bitcoin transactions.
Coinbase earns a significant amount of revenue from transaction fees, which means you'd expect bullish markets to be highly beneficial for the company. Because transaction fees are percentage-based, it should collect more dollars per transaction, while more investors rushing to capitalize on a bull run should translate to a higher number of transactions.
Over the first three quarters of 2023, however, the trends generated have been decidedly mixed, according to Coinbase’s public financials. The company has seen a 16% decline in monthly transacting users (MTUs) — defined as consumers who actively or passively transacts in one or more products on the platform at least once during the rolling 28-day period ending on the date of measurement — and a 54% decline in trading volume. Consumer trading volume is down 69% while institutional volume is down 50%. Total transaction revenue in the YTD was 51% lower than in the same period last year, while 48.7% of all crypto assets held by customers and 37% of transaction revenue is related to Bitcoin (BTC).
The company registered a loss in trading volume in virtually every crypto asset except for Bitcoin, wherein the share of trading volume registered a 28% increase.
