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This article delves into the cash position and cash flow statistics of Coinbase Global, Inc. – one of the world’s most well-known and widely used cryptocurrency exchanges.
Let’s take a look.
For other key statistics of Coinbase Global, you may find more resources on these pages:
Users Count
Crpto Holdings
Revenue Breakdown
Transaction Revenue
Subscription & Services Revenue
Revenue By Region
Expenses
Trading Volume
Employee
Financial Health
Please use the table of contents to navigate this page.
Table Of Contents
Definitions And Overview
O2. Why Does Coinbase Keep So Much Cash?
Consolidated Results
A1. Cash & Cash Equivalents
A2. Total Cash On Hand
A3. Customer Custodial Funds
Cash Flow
C1. Net Cash From Operations
C2. Free Cash Flow
Cash Flow Margins
D1. Operating Cash Flow Margin
D2. Free Cash Flow Margin
Conclusion And Reference
S1. Insight
S2. References and Credits
S3. Disclosure
Definitions
To help readers understand the content better, the following terms and glossaries have been provided.
Customer Custodial Funds: Coinbase’s customer custodial funds refer to the fiat currencies and cryptocurrencies that Coinbase holds on behalf of its customers.
These funds are kept separate from Coinbase’s own operational funds to ensure that customer assets are protected and can be returned to customers even if Coinbase were to face financial difficulties.
The custodial nature of these funds means that Coinbase acts as a custodian, holding the funds securely and executing transactions as directed by the customer, without taking ownership of the assets themselves.
This arrangement is crucial for maintaining trust and security in the platform’s operations, ensuring that users’ assets are safeguarded against unauthorized access or misuse.
Operating Cash Flow: Operating cash flow (OCF) measures the cash generated by a company’s regular business activities. This metric indicates if a company can generate enough positive cash flow to sustain and expand its operations or if it needs external financing for capital expansion. In other words, OCF helps to assess a company’s ability to fund its current and future growth without relying on external sources.
Free Cash Flow: Free cash flow (FCF) refers to a company’s cash generated after accounting for the cash outflows supporting its operations and maintaining its capital assets. Simply put, it is the cash remaining after a company’s payment of operating expenses (OpEx) and capital expenditures (CapEx).
Cash Flow Margin: The cash flow margin is a financial ratio that calculates the cash generated as a percentage of total sales revenue over a specific period. This metric is a reliable indicator of a company’s cash flow efficiency.
USD Coin or USDC: A stablecoin issued by Circle that is backed by dollar-denominated assets held by the issuer in segregated accounts with U.S. regulated financial institutions. Coinbase and Circle co-founded the Centre Consortium, which supports and administers the governance of USDC.
Why Does Coinbase Keep So Much Cash?
Coinbase, like many companies within the rapidly evolving and volatile cryptocurrency market, opts to keep a significant portion of its reserves in cash for several reasons:
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**Liquidity**: Cash ensures that Coinbase can easily meet its short-term operational costs and obligations without needing to sell volatile assets, which may not always be favourable. This liquidity is crucial for day-to-day operations, including payroll, rent, and other overheads.
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**Volatility Protection**: The cryptocurrency market is highly volatile. By holding a substantial amount of cash, Coinbase can shield itself from adverse impacts due to sudden drops in the value of cryptocurrencies. This conservative approach helps stabilize their operations despite market fluctuations.
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** Regulatory Compliance and Risk Management **: The regulatory environments around cryptocurrencies are still evolving. Holding cash allows Coinbase to navigate these uncertain waters more safely, ensuring they have the funds to comply with potential regulatory requirements or cover unforeseen legal costs without liquidating assets at a loss.
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**Investment and Acquisition Opportunities**: Having cash on hand gives Coinbase the flexibility to quickly seize investment opportunities or acquire other companies without selling assets, which might not be timely or could result in losses.
For your information, Coinbase’s crypto asset investment was worth over US$2 billion as of 1Q 2024, according to this article: Coinbase crypto asset investment and holdings.
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**Customer Trust and Stability**: Demonstrating that they have significant cash reserves can build and maintain trust with users and investors, showing that Coinbase has the stability and resources to support its operations and customer assets even in adverse market conditions.
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**Interest Income**: In a rising interest rate environment, holding cash or cash equivalents can be a source of income through interest, which can be a low-risk way to generate additional revenue.
It’s a strategic choice that balances risk management with operational flexibility, aiming to ensure long-term stability and growth in the unpredictable landscape of cryptocurrency trading and services.
Cash & Cash Equivalents
Coinbase Global’s cash and cash equivalents, measured in millions of dollars, show significant variation across the five fiscal years presented. In FY2020, the company reported 1,062 million in cash and cash equivalents, establishing the baseline for the period. By FY2021, this figure rose sharply to 7,123 million, marking the highest level in the dataset.
In FY2022, cash and cash equivalents moderated to 4,425 million, followed by a slight increase to 5,139 million in FY2023. In FY2024, the balance strengthened further, reaching 8,544 million, closing the period at the second‑highest level recorded.
Across FY2020 to FY2024, Coinbase Global’s cash and cash equivalents demonstrate a trajectory of rapid expansion, adjustment, and renewed growth. The peak in FY2021 stands out as a high watermark, followed by a period of moderation in FY2022 and FY2023.
The rebound in FY2024 highlights a return to stronger liquidity levels, positioning the company with a substantial cash base compared to the start of the period. Overall, the data underscores a pattern of resilience and sustained financial capacity, with cash and cash equivalents ending the period well above the initial baseline.
Total Cash On Hand
Besides carrying cash and cash equivalents, Coinbase also carries restricted cash and USD Coins (USDC). The definition of Coinbase’s USD Coins is available here: USD Coins.
According to Coinbase, USDC is a stablecoin that can be redeemed one USDC for one U.S. dollar on demand.
While not accounted for as cash or cash equivalents, Coinbase treats its USDC holdings as a liquidity resource.
That said, Coinbase’s total cash on hand reached a record figure of $9.8 billion as of the end of 2024 after considering the restricted cash and USDC.
On average, Coinbase’s total cash on hand has measured $6 billion annually since 2020.
Customer Custodial Funds
The definition of Coinbase’s customer custodial funds is available here: customer custodial funds.
Apart from its own cash and cash equivalents, Coinbase also holds a considerable amount of customer cash, which we refer to it as customer custodial funds. As the definition goes, this particular cash does not belong to the company.
When we combined the customer custodial funds with the cash and cash equivalents, restricted cash, and USDC, Coinbase’s total cash on hand reached a massive amount of $16 billion as of the end of 2024.
Net Cash From Operations
The definition of Coinbase’s net cash from operations is available here: net cash from operations.
Coinbase’s net cash from operations has slowly recovered in recent periods after going through several periods of negative cash flow. It reached $2.6 billion as of the end of 2024. Coinbase has consecutively generated positive operating cash flow since 2023.
Although net cash from operating activities has recovered, it is far below the previous highs, indicating that there are rooms for improvement.
Free Cash Flow
The definition of Coinbase’s free cash flow is available here: free cash flow. Coinbase’s free cash flow is cash left from operating activities after accounting for the entire net cash from investing activities.
Coinbase Global reported a significant shift in free cash flow performance over the most recent three-year interval. In 2022, the company recorded a deficit of $2,249 million. This was followed by a return to positive territory in 2023, with a reported $928 million. The upward momentum accelerated in 2024, as free cash flow reached $2,275 million.
The five-year period illustrates a high-beta recovery profile. After an initial peak in 2021 and a subsequent deep trough in 2022, the company has successfully rebuilt its cash-generating capacity. The trend indicates a stabilizing financial trajectory, with the 2024 results marking a near-full restoration of the liquidity highs seen earlier in the decade.
Operating Cash Flow Margin
The definition of Coinbase’s cash flow margin is available here: cash flow margin.
Coinbase’s operating cash flow margin has surged considerably in recent years, reaching 39% as of 2024, up significantly from the ratio recorded a year ago.
The significant recovery in Coinbase’s operating cash flow margin illustrates the company’s improving efficiency in converting operating cash flow from revenue.
Free Cash Flow Margin
The definition of Coinbase’s cash flow margin is available here: cash flow margin.
Similarly, Coinbase’s free cash flow margin also has significantly recovered since 2023, topping a record figure of 35% as of 2024, up considerably over the same quarter a year ago.
The result shows that Coinbase managed to convert roughly 35% of its total revenue into free cash flow.
Summary
Coinbase held a significant cash balance as of 2024, with the total cash on hand figure reaching US$10 billion in 2024.
Apart from its own cash, Coinbase also held customer cash, referring to as customer custodial funds. This particular cash exceeded $6 billion as of 2024.
Together with the customer custodial cash, Coinbase’s total cash measured over $15 billion in 2024.
Moverover, Coinbase has recovered considerably in terms of operating and free cash flow generation in recent periods.
References and Credits
1. All financial figures presented were obtained and referenced from Coinbase Global, Inc.’s annual and quarterly filings, which are available in Coinbase Investor Relations.
2. Pixabay images.
Disclosure
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