The largest US-based crypto exchange Coinbase has seen its trading volume drop by 29% from $462 billion in Q2 to $327 billion in Q3.
The company stressed market volatility as a significant factor impacting transaction revenue in its most recent report. The numbers were disappointing, but according to the platform, it was still a win.
After becoming a publicly traded firm in April, Coinbase‘s revenue reached new highs from April to June of this year. However, it was unable to avoid the consequences of market-wide bearish movements during the next three months.
The exchange earned $1.2 billion in net revenue, with $1.1 billion coming from transaction fees. Furthermore, retail transaction revenue accounted for $1 billion in Q3, a 44 % decrease from the previous quarter’s statistics. Coinbase’s institutional transaction revenue was also down nearly 34% from Q2 to $67.7 million, similar to the retail counterpart.
Subscriptions and Services Save the Day
While everything else saw a huge drop, it was subscription and service revenue that kept Coinbase’s earnings from plummeting much worse. Overall, revenue from these sources was $145 million in Q3, up 41% from the previous quarter. Apart from the “Earn” campaign, which reduced income by 10% and totalled $15.2 million, the quarter’s results were boosted by Blockchain rewards and Custodial charge revenue.
- Staking and Ethereum 2.0 drove Blockchain rewards revenue to $81.5 million.
- Owing to lower Bitcoin and crypto prices, as well as maximum net inflows using its custody solution, Coinbase managed to rake in total custodial fee revenue of more than $31 million.
There is no evidence that users are migrating from Coinbase Consumer to Coinbase Pro.
In the third quarter, Coinbase’s weighted average retail transaction fee rates also decreased. According to the exchange, the drop is due to significantly higher trade volumes on its professional trading platform, Coinbase Pro.
Coinbase Pro has a “tiered” fee structure, which means that users who trade larger amounts of money pay lower fees on average. According to the studies, there were no changes to its retail charge structure in the quarter in question, and as a result, there was no evidence of customer movement from the general Consumer platform to the Pro.
In comparison to the previous quarter, weighted average institutional fee rates remained unaffected in Q3. The largest contributors to institutional trading volume were market makers.
