Coinbase's Income Still Depends on Bitcoin

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Bittime - Coinbase is a platform founded in 2012 to make it easier to buy and sell bitcoin from bank accounts in the US. However, as time goes by and new sources of income emerge, Coinbase is still heavily dependent on the largest cryptocurrency, namelybitcoin.

This dependence was further increased when the US Securities and Exchange Commission (SEC) approved spot bitcoin ETFs. Coinbase receives management fees for some of these ETFs, but some analysts warn that the growth of these new trading products could hurt Coinbase. 

However, with the SEC's ongoing efforts to declare trading of some non-bitcoin tokens on Coinbase illegal, the importance of bitcoin trading to Coinbase's business does not appear at risk of declining.

However, bitcoin trading has become less important to Coinbase than before. In 2020 and 2021, trading fees accounted for more than 80% of the company's quarterly revenue.

It started when Coinbase developed its staking business and partnership with stablecoin issuer Circle. Transaction fees account for more than half of Coinbase's current revenue, and bitcoin accounted for 38% of those transaction fees in the third quarter. Other sources of income also face significant risks.

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Bitcoin Remains Top Revenue Contributor

Yields earned from USDC reserves have become an increasingly large portion of Coinbase's revenue. The 5.1% yield offered by Coinbase on USDC is based on its Treasury backing. A potential drop in US interest rates could lead to a decline in Coinbase's stablecoin revenue.

Blockchain rewards, include returns earned from staking tokens to secure the blockchain, and account for 11% of Coinbase's revenue in 2023. Staking has been a prominent part of Coinbase's diversification strategy.

However, no one questions Coinbase's ability to facilitate investment flows into and out of bitcoin. Some analysts think Coinbase's revenue from bitcoin trading is threatened by the much-anticipated approval of spot bitcoin ETFs , creating competition for Coinbase's bitcoin trading business.

Overall, Coinbase's use of custodial services will also depend on the continued rise in the price of bitcoin. This is one of the main factors that determines their income towards 2024.

Also Read: How to Mine Bitcoin from Home

How to Buy Crypto on Bittime

You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.  

To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. 

Learn  Complete Guide How to Buy Crypto on Bittime . 

Monitor price chart movements of Bitcoin (BTC) ,  Ethereum (ETH) ,  Solana (SOL)  and other cryptos to find out today's crypto market trends in real-time on Bittime. 

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What is Bitcoin and How Does It Work?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.