Cryptocurrency exchange Coinbase (COIN) sold 12,652 ETH in the fourth quarter, Standard Chartered (STAN) reports

Coinbase sold 12,652 ETH in Q4, Standard Chartered reports

Standard Chartered's Jeffrey Kendrick noted that Base's revenue was fueling Ethereum sales rather than long-term accumulation, but the cryptocurrency exchange has refuted that claim.

Author: Francisco Rodriguez | Edited by: Sheldon Reback Updated: Mar 20, 2025 16:28 UTC Published: Mar 20, 2025 09:20 UTC

What is important to know:

• According to Standard Chartered's Jeffrey Kendrick, Base creates demand for ETH and the profits are converted into dollars.
• Kendrick noted that fourth-quarter data indicates the cryptocurrency exchange sold 12,652 ETH, following a risk-adjusted selling pattern.
• Kendrick concludes that Coinbase will not hold Base's ETH profits for the long term.
• Coinbase said all sales were primarily to fund operations and denied claims of regular trading.

Coinbase (COIN) sold 12,652 ether (worth $25 million at current prices) in the fourth quarter, when its price was about double its current value, according to Jeffrey Kendrick, head of digital asset research at Standard Chartered Bank.

In his post, Kendrick said he analyzed the crypto exchange’s quarterly reports, which show it holds ether (ETH) for various categories, including investment and operational purposes. He estimates that roughly 80% of the revenue generated by Base, Coinbase’s Ethereum Layer 2 blockchain, is profit.

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Notably, the company's trading timing coincides with price movements, he noted. Coinbase netted in the third quarter, when ETH was trading at around $2,500, and netted in the fourth, when the second-largest cryptocurrency hit $4,000. The price is currently around $2,000.

“The fact that they bought in Q3 (when average prices were low) and sold in Q4 (when average prices were higher) indicates that Coinbase is acting like any profit maximizer, adjusting for risk,” Kendrick wrote.

Coinbase confirmed that it sold some ether to fund its operations, without specifying how much was involved.

“Base earns ETH through sequencing fees, and the ETH earned is primarily held for long-term investments or used to cover operating expenses, including tax liabilities and reinvesting in growth through things like salaries, grants, acquisitions, and public good funding,” a company spokesperson said in an email.

Kendrick calculates that net ETH sales have been 1,558 over the last three quarters, implying a strategic selling model rather than a holding model. He arrives at this conclusion by subtracting Base's ETH gains from the changes in Coinbase's ETH holdings.