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How Coinbase Makes Money: A Business Model Breakdown

A breakdown of Coinbase's products, business model, and key business metrics.

Updated quarterly. Last updated: June 21, 2021.


Coinbase Overview

Ticker COIN
Industry Financial services (crypto)
CEO Brain Armstrong
Year Founded June 20, 2012
IPO Date April 14, 2021
TTM Revenue $2.8 billion
TTM EBITDA $1.7 billion
YTD Return -22.66%

What Coinbase Does

Coinbase lets people buy and sell cryptocurrency.  

It has three sets of customers:

  • Retail users
  • Institutions like hedge funds and corporations
  • Ecosystem partners like developers and coin issuers

They support over 90 cryptocurrencies, including Bitcoin, Etherium, Litecoin, and others.

Coinbase's product portfolio

If you want to dig deeper into each of these products, go to page 141 of Coinbase's S-1.


How Coinbase Makes Money—Its Business Model

Coinbase makes money two ways:

  • Transaction revenue
  • Subscription and services revenue

Why these two metrics are important: Transaction revenue is volatile. It often follows the price of Bitcoin, which isn't ideal.

Eventually, they want other revenue sources not tied to the price of Bitcoin.

Transaction vs. subscription revenue

Transaction revenue breakdown

  • Transaction Revenue: Fees earned when customers trade on its platform. The fee is based on the price and quantity of the crypto asset bought, sold, or withdrawn.

Subscription and services revenue breakdown

  • Custodial: Fees earned from cold storage services.
  • Staking: Fees earned when Coinbase creates or validates a block (files). Staking revenue is based on the quantity, price, and rewards rate of the staked crypto asset. Read this for more details.
  • Earn Campaign: Coinbase helps new companies educate their customers through courses. Coinbase earns a commission when a customer completes a course. Here are some examples.

Coinbase's Key Business Metrics

Coinbase tracks four metrics to measure the health of its business.

  • Verified users
  • Monthly transacting users (MTU)
  • Trading volume
  • Assets on platform

Verified and monthly transacting users

  • Verified Users: Retail users, institutions, and ecosystem partners with a registered account and confirmed their email address or phone number. Verified users are the top level of its customer acquisition funnel. The goal is to convert them into monthly transacting users (MTU).
  • Monthly Transacting Users (MTU): A user who transacts on the Coinbase platform at least once during a rolling 28-day period.

Trading volume (retail vs. institutional)

Trading volume breakdown

Assets on platform (retail vs. institutional)

  • Assets on Platform: The total value of both fiat currency (U.S. Dollars) and crypto-assets held or managed in digital wallets on the Coinbase platform, including their custody services (cold storage).

Assets on platform breakdown


Coinbase's Competitors