Cryptocurrency exchange Coinbase posted massive results for 2021. Net revenue for the year was $7.3 billion (up 544% on 2020) and net income of $3.6 billion (up more than 1000%). In the fourth quarter transacting users were 11.4 million compared to 2.8 million in 2020.
One oddity is a lack of increased market share in assets under custody (AUC) which Coinbase refers to as assets on platform. The figure rose by 208%, but the growth in market capitalization of cryptocurrency was up 196%, implying little market share gain. That’s despite an increase in its market share of transactions.
We wondered whether the tepid asset growth was because more of it was institutional and self custodied, but this doesn’t appear to be the case. Yes, there was a far higher proportion of institutional trading volume. In 2021, institutions made up 68% of Coinbase’s transaction volume compared to 37.8% in 2020. However, when it came to assets, in 2020, half was institutional, which dropped insignificantly to 49.2% in 2021.
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