Coinbase, one of the biggest crypto exchanges, reportedly sold 12,652 Ethereum (ETH) in the fourth quarter of 2024, according to Standard Chartered’s Geoffrey Kendrick. This sale, worth about $25 million at today’s prices, has sparked discussions on whether Coinbase is strategically selling ETH for profit rather than holding it long-term.
Strategic Selling or Just Business Operations?
Kendrick, who heads digital assets research at Standard Chartered, analyzed Coinbase’s quarterly reports. He found that the exchange holds ETH in different categories, including investment and operational funds.
Interestingly, he noted that Coinbase tends to buy when ETH prices are low and sell when prices rise. In Q3, when ETH was around $2,500, the company was a net buyer. But in Q4, when ETH climbed to $4,000, Coinbase sold more than it bought.
Kendrick believes this pattern shows Coinbase is acting like a “risk-adjusting profit maximizer.” Instead of accumulating ETH for the long haul, the exchange appears to be taking advantage of price swings to manage its financial strategy.
Coinbase Responds to Claims
In response, Coinbase acknowledged selling some ETH but emphasized that the funds were used for operational needs. A company spokesperson explained that Base, Coinbase’s Ethereum layer-2 blockchain, 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.
Coinbase also denied being a trading-focused entity, pointing out that its ETH holdings for investment grew by 20% in 2024. The exchange stressed that it does not actively trade crypto assets but may lend or stake them when necessary.
Previous Accumulation Claims
This isn’t the first time Coinbase has faced scrutiny over its ETH holdings. 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.
Ethereum Price Jump, But ETF Bleeds
Ethereum is back on the rise, jumping over 7% and reclaiming the crucial $2,000 level. But despite this rally, the U.S. Ethereum spot ETF market is still bleeding cash. According to Farside, ETFs saw a massive $11.7 million outflow yesterday, extending the trend of investors pulling out.
BlackRock’s ETHA led the losses, recording a staggering $12.9 million net outflow. Fidelity’s FETH wasn’t spared either, losing $2 million, while Grayscale Mini ETH saw another $7.7 million vanish.
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