This article presents the number of verified users and monthly transacting users (MTU) of Coinbase Global, Inc., (NASDAQ: COIN).
These measures are part of Coinbase’s key business metrics which the company uses to evaluate its business performance, identify trends, and make strategic decisions, according to the 2022 annual report.
Investors who are interested in Coinbase’s total revenue and revenue by segment may visit the page here – How Coinbase Makes Money.
Verified User Definition
Coinbase defines verified users as all consumers, institutions, and developers that have registered an account on its platform and confirmed either their email address or phone number, or that have established an account with a username on its non-custodial wallet application, as of the date of measurement, according to the 2022 annual report.
The number of verified users is not without its weaknesses.
Firstly, verified users do not necessarily mean paying customers but the probability is higher as these customers have demonstrated an interest in Coinbase’s platform or direct intent to transact with crypto assets.
Therefore, a growing verified user number may or may not translate to more revenue.
Secondly, according to Coinbase, verified users may overstate the number of unique customers who have registered an account on its platform.
The reason is that a customer may register for, and use, multiple accounts with different email addresses, phone numbers, or usernames.
Verified Users By Year
On an annual basis, Coinbase’s verified users reached 110 million as of fiscal 2022, representing a rise of 24% over 2021.
Since fiscal 2019, Coinbase’s number of verified users has been an incredible success and has more than tripled in just 3 years.
Verified Users By Quarter
The quarterly plot shows the steady rise of Coinbase’s verified users since fiscal 2019.
In the last 3 quarters of 2022, Coinbase reported verified users of 110 million, 108 million, and 103 million, respectively.
In fiscal 2023, Coinbase stopped presenting the quarterly verified user data, citing that the data do not track user activities leading to revenue generation and, as a result, are not indicative of the company’s business performance, including with respect to revenue and operating results.
Verified Users Growth Rates
As presented in the plot above, Coinbase’s verified user growth has considerably slowed in post-pandemic periods in fiscal 2022.
As of 4Q 2022, Coinbase’s verified user growth totaled only 23.6%, which was a far lower figure compared to the 107% measured in the same quarter a year ago.
Also, Coinbase achieved a peak verified user growth rate of 107% in fiscal 4Q 2022, but the growth rate has since been on the decline.
The Monthly Transacting User (MTU) is defined as a consumer who transacts one or more products on Coinbase’s platform at least once during the rolling 28-day period ending on the date of measurement, according to the company’s annual report.
There are 2 types of MTU presented in Coinbase’s earnings releases: quarterly and annual MTU numbers.
According to Coinbase, MTU is an important statistic because it represents the transacting base of consumers who drive potential revenue-generating transactions on the company’s platform.
Therefore, the higher the MTU figures, there is a high probability of more revenue.
Again, the MTU is not without its weaknesses.
In this aspect, the MTU may overstate the number of unique consumers due to differences in product architecture or user behavior.
MTU By Year
MTU by year is the MTU figure based on the last quarter result of the year.
There is another one that measures the annual average and will be presented in the next section.
That said, Coinbase experienced an incredible rise in MTU since fiscal 2019 and the latest figure came in at 8.3 million as of 2022.
Although the 2022 result was lower by 26% year-on-year, Coinbsae’s MTU has risen by more than 800% since fiscal 2019.
On a long-term basis, Coinbase’s MTU result is favorable.
Annual Average MTU
Contrary to the previous MTU result, the annual average MTU is defined as the average of the MTU for the whole fiscal year.
Therefore, the annual average MTU may represent a more consistent MTU result.
That said, Coinbase’s MTU continued to rise in fiscal 2022 despite the previous result stating a decline.
However, Coinbase’s MTU in fiscal 2022 grew only 5% year-on-year compared to a 4-fold increment in fiscal 2021.
Therefore, the growth of Coinbase’s MTU has significantly slowed in recent years.
MTU By Quarter
Coinbase reported quarterly monthly transacting users of 7.3 million, 8.4 million, and 8.3 million in 2Q 2023, 1Q 2023, and 4Q 2022, respectively.
Coinbase’s MTU has significantly slowed in recent quarters in 2023 compared to 2022.
For example, as of 2Q 2023, Coinbase’s MTU of 7.3 million was down by a massive 19% over the same quarter a year ago.
MTU Growth Rates
Coinbase’s MTU growth rates have started to decline after 2021 and dropped below zero since 2022.
As of 2Q 2023, Coinbase reached an MTU growth rate of -18.9% compared to the 2.3% measured a year ago, possibly the worst figure the company has ever achieved.
Before 2022, Coinbase’s MTU growth rates were mostly in triple digits but the result has completely reversed in recent years.
Keep in mind that the MTU has a profound impact on Coinbase’s revenue as the metric is closely correlated to the company’s revenue-generating capability.
Ratio Of MTU To Verified Users
The ratio measures the percentage of transacting users to the total number of verified users.
The plot shows that Coinbase reached a peak ratio of more than 10% somewhere during 2021.
Since then, Coinbase’s ratio of MTU to verified users has been on the decline and totaled only 7.5% as of 4Q 2022.
The data in the plot above ended on 4Q 2022 as Coinbase has stopped publishing the verified user’s data since 1Q 2023.
If Coinbase’s verified users were to remain the same as the 4Q 2022 figure going forward, the ratio would go even lower as shown in the plot above.
As of 2Q 2023, Coinbase’s projected ratio of transacting users to verified users would have been only 6.6%.
The ratio reinforces the fact that Coinbase’s monthly transacting users have indeed been on the decline.
As Coinbase’s transacting users have significantly declined in fiscal 2022, its revenue also followed the same pattern in the same period.
This article, Coinbase Revenue Breakdown, shows that Coinbase’s revenue tumbled significantly in fiscal 2022 over 2021.
Credits and References
1. All financial figures presented in this article were obtained and referenced from Coinbase Global, Inc.’s SEC filings, earnings reports, financial statements, news releases, shareholder presentations, etc., which are available in Coinbase Investor Relations.
2. Featured images in this article are obtained free and are used without any attribution from Pixabay.
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