Coinbase, one of the largest crypto exchanges, sold 12,652 Ethereum in the fourth quarter of 2024, amounting to about $25 million. This sale has prompted discussions about whether it is a profit-driven strategy or part of the company's regular operations.
Strategic Selling or Just Business Operations?
Geoffrey Kendrick from Standard Chartered analyzed Coinbase’s quarterly reports and noted that the exchange holds ETH in various categories including investment and operational funds. He observed that Coinbase buys ETH when prices are low and sells when they rise. In Q3 2024, the company was a net buyer, but in Q4, it sold more than it bought. Kendrick believes Coinbase acts as a 'risk-adjusting profit maximizer,' capitalizing on price swings to manage its financial strategy.
Coinbase Responds to Claims
Coinbase acknowledged selling some ETH but emphasized that the funds were used for operational needs. A company spokesperson explained that Coinbase’s Ethereum layer-2 blockchain, Base, earns ETH through sequencer fees. While most of this ETH is held for long-term investment, some are used for salaries, acquisitions, taxes, and grants. The company highlighted that its ETH holdings for investment grew by 20% in 2024 and stressed that it does not actively trade crypto assets but may lend or stake them when necessary.
Previous Accumulation Claims
Coinbase has faced scrutiny over its ETH holdings before. Just last month, a Base representative dismissed rumors about ETH sales, stating that Coinbase had accumulated over $300 million in ETH—more than double its earnings from Base.
Coinbase's sale of 12,652 ETH at the end of 2024 has led to considerable discussion. Despite speculations of strategic intentions, the company insists that many of the sales are aligned with operational needs.
