The largest US-based crypto exchange saw a significant drop of 29%, from $ 462 billion in the second quarter to $ 327 billion in transaction volume in the third quarter. In its latest report, the company emphasized the volatility in the market as an important factor influencing the transaction revenue. The numbers were pretty disappointing, but depending on the platform, it was still a win.
Coinbase Takes a Hit
Coinbase’s revenue had hit record figures from April to June this year after its debut as a publicly-traded company. But he couldn’t escape the ramifications of market-wide bearish moves over the next three months.
The exchange registered net revenue of $1.2 billion, of which $1.1 billion constituted transaction revenue. In addition, $ 1 billion came from third-quarter retail transaction revenue, down 44% from second-quarter results.
Similar to the retail counterpart, Coinbase’s institutional transaction revenue was also down by almost 34% from Q2 and stood at $67.7 million.
Subscription and services come to the rescue
While everything else saw a significant reduction, it was the revenue from subscriptions and services that managed to keep Coinbase’s revenue from declining even further.
All in all, the revenue from these sources contributed a total of $145 million in Q3 and was up by a whopping 41% compared to Q2. In addition to the “Earn” campaign, which reduced revenue by 10% and totaled $ 15.2 million, Blockchain rewards and custodial fee revenue increased the numbers for the quarter.
- Staking and Ethereum 2.0 drove Blockchain rewards revenue to $81.5 million.
- Due to falling Bitcoin and crypto prices, as well as maximum net inflows through its custody solution, Coinbase has managed to rake in total custodial fee revenue of over $ 31 million.
No evidence of users migration from Coinbase Consumer to Pro
Coinbase also recorded a slump in terms of weighted average retail transaction fee rates in the third quarter. The drop can be attributed to relatively higher trading volumes on its professional trading platform – Coinbase Pro, according to the exchange.
Coinbase Pro offers, what is called, a “tiered” fee structure wherein users who trade higher dollar amounts pay lower fees, on average. Reports suggest that there were no changes to its retail pricing structure during the said quarter, and as a result, there was no evidence of users migrating from the General Consumer platform to the Pro.
However, weighted average institutional fee rates remained unfazed in Q3 as compared to the quarter before. Market makers have been the main contributors to the volume of institutional transactions.
