Coinbase Trading Volume By Segment And Crypto Asset

Crypto asset. Pixabay image.

This article presents the trading volume of Coinbase Global, Inc. (NASDAQ: COIN).

The trading volume is one of the key metrics of Coinbase, which it uses to evaluate its business performance, identify trends, and make strategic decisions.

Investors may find other Coinbase’s statistics, such as verified and monthly transacting users at this page – Coinbase Verified Users And MTU.

Let’s examine further details, beginning with the table of contents below.

Trading Volume Definition

Coinbase defines trading volume as the total U.S. dollar equivalent value of spot-matched trades transacted between a buyer and seller through its platform during the period of measurement.

In addition, according to the 2022 annual report, Coinbase’s trading volume also represents the product of the quantity of assets transacted and the trade price at the time the transaction was executed.

Coinbase believes the trading volume reflects liquidity on its order books, trading health, and the underlying growth of the cryptoeconomy.

For the six-month period that ended on June 30, 2023, no asset other than Bitcoin and Ethereum individually represented more than 10% of Coinbase’s Trading Volume or transaction revenue, respectively, according to the 2Q 2023 10-Q report.

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Trading Volume By Year

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Coinbase’s trading volume in fiscal year 2022 was $830 billion, a 50% decrease from 2021 but a 330% increase from 2020.

In fiscal 2021, Coinbase had the highest trading volume of all time, reaching US$1.7 trillion.

During the first half of 2023, Coinbase’s trading volume was $237 billion, which is significantly lower than the amount reported during the same period in 2022.

Coinbase attributed the decrease in trading volume in 2022 and 2023 to low cryptocurrency prices and volatility caused by weaker macroeconomic conditions.

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Trading Volume By Year Growth Rates

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Coinbase’s trading volume increased by over 700% year-over-year in fiscal 2021, marking the most significant growth since 2020.

However, the trading volume experienced a decline of 50% in 2022, illustrating the first such massive decrease in three years.

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Trading Volume By Quarter

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The chart above displays a significant decrease in Coinbase’s trading volume during post-pandemic periods since fiscal year 2021.

During the first half of 2023, Coinbase’s trading volumes were $145B and $92B, respectively, marking significant declines from the prior year’s period.

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Trading Volume By TTM

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Similarly, the TTM plot above shows Coinbase’s trading volume decline during post-pandemic periods since fiscal year 2021.

A noteworthy trend is that Coinbase’s trading volume may have peaked in fiscal 2021 after topping nearly $1.7 trillion in 4Q21.

On a TTM basis, Coinbase’s trading volume hit $541 billion as of 3Q 2023 – a level not seen since 2021.

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Growth Rates Of Trading Volume By TTM

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The growth rate plot above indicates the decline of the growth of Coinbase’s trading volume.

Coinbase’s trading volume experienced double-digit growth rates before 2023.

Since the end of 2022, growth rates have been negative, totaling -61% as of 3Q 2023.

This is the lowest figure ever measured, implying that trading volumes have not only stopped growing but have declined.

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Consumer And Institutional Trading Volumes

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Coinbase’s trading volume can be classified into two main categories: consumer and institutional.

The retail market or consumer segment comprises individual investors who trade independently.

On the other hand, the institutional market comprises large investment funds, pension funds, and other financial institutions that invest money on behalf of their clients.

Although Coinbase’s consumer segment has a significant trading volume, it still pales compared to the institutional.

The institutional, which includes hedge funds, asset managers, and other large financial institutions, tend to trade in much larger volumes than individual retail investors, as displayed in the chart above.

It is important to note that there has been a significant decline in the trading volumes of consumer and institutional segments since 2021.

During fiscal year 2022, Coinbase recorded trading volumes of US$167B and US$663B in the consumer and institutional segments, respectively.

However, these figures dropped drastically in the first half of 2023 to only $35B and $202B.

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Consumer And Institutional Trading Volumes In Percentage

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Coinbase’s institutional clients accounted for 85% of the company’s total trading volume in H1 2023, up from 80% in 2022, representing the highest ratio ever recorded.

In addition, the percentage of institutional trading volume also has significantly increased since 2019 and has continued to rise despite the decrease in trading volumes in post-pandemic periods.

On the other hand, as of the first half of 2023, Coinbase’s consumer segment accounted for only 15% of its trading volume, which is less than half of what it was in 2019.

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Growth Rates Of Consumer And Institutional Trading Volumes

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Coinbase experienced significant trading volume growth in fiscal 2021, with consumer and institutional volumes increasing by 633% and 847% YoY, respectively.

However, the trading volume in fiscal year 2022 declined by 69% and 42% for the consumer and institutional segments, respectively, after a period of growth in the previous fiscal year.

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Bitcoin, Ethereum, Litecoin, And Others Trading Volumes

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In addition to being divided into consumer and institutional categories, Coinbase’s trading volume can be further classified based on the different types of cryptocurrencies traded on the platform.

The major cryptocurrencies traded on Coinbase’s platforms with the biggest volumes are Bitcoin, Ethereum, and Litecoin, as shown in the chart above.

In fiscal year 2022, Bitcoin trading volume on Coinbase’s platform totaled $241B, down from $401B the previous year.

On the other hand, Ethereum’s trading volume was slightly lower than Bitcoin’s, at US$208B and US$351B for fiscal 2022 and 2021, respectively.

Litecoin’s trading volume surged to US$50 billion in fiscal 2021, a significant rise from 2020.

However, Coinbase has stopped providing Litecoin’s trading data breakdown for 2022 and beyond.

A significant trend is the decrease in trading volume of major cryptocurrencies on Coinbase’s platforms since fiscal 2021.

As of 2023, Coinbase recorded a considerable decline in trading volume for Bitcoin, Ethereum, and other cryptocurrencies.

The trading volumes for Bitcoin, Ethereum, and other cryptocurrencies were only US$83B, US$55B, and US$100B, respectively, in the first half of 2023.

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Bitcoin, Ethereum, Litecoin, And Others Trading Volumes In Percentage

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Bitcoin made up 29% of Coinbase’s total volume in 2022, with that number increasing to 35% in 2023, making it the crypto asset with the largest trading volume.

On the other hand, Ethereum accounted for a slightly lower trading volume, totaling 25% and 23% of Coinbase’s total volume in 2022 and 2023, respectively.

Despite surging to US$50 billion in trading volume in 2021, Litecoin accounted for only 3% of Coinbase’s total volume.

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Growth Rates Of Bitcoin, Ethereum, Litecoin, And Others Trading Volumes

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Coinbase experienced an astonishing surge in trading volumes for all cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, in 2021.

However, all cryptocurrencies’ trading volume growth rates crashed a year later.

For example, Bitcoin’s trading volume declined by 40%, while Ethereum declined by 41% in 2022.

For the rest of the crypto assets, they declined by 57% in the same period.

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Conclusion

Coinbase’s crypto asset trading volume peaked in 2021 but significantly declined in 2022 and 2023.

The same goes for the trading volume of Coinbase’s consumer and institutional segments.

Despite the recent turbulence in the cryptocurrency market, Coinbase may still be able to reach its previous trading volume high.

The prices of most crypto assets have experienced significant recovery, offering renewed hope for Coinbase and its investors.

With the market showing signs of stabilization, Coinbase may have the opportunity to regain its momentum and continue to grow its trading volume.

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Credits and References

1. All financial figures presented in this article were obtained and referenced from Coinbase Global, Inc.’s quarterly and annual filings, earnings reports, financial statements, news releases, shareholder presentations, etc., which are available in Coinbase Investor Relations.

2. Pixabay images.

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Disclosure

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