Coinbase is one of the largest and most popular cryptocurrency exchanges in the world. But if you’ve ever wondered how Coinbase actually makes money, you’re not alone! Let’s break down their revenue model into simple and easy-to-understand points.
Transaction Fees: The Main Money Maker
Coinbase’s primary source of revenue comes from transaction fees. Whenever you buy, sell, or trade cryptocurrency on the platform, Coinbase charges a fee. These fees can be a flat rate or a percentage of your transaction, depending on how much you’re trading. With millions of users buying and selling crypto every day, these fees quickly add up and are the backbone of Coinbase’s earnings.
Subscription Services
Apart from transaction fees, Coinbase offers subscription-based services like Coinbase Pro and Coinbase One. These services are designed for serious traders and investors who want access to lower trading fees, advanced features, and more professional tools. By offering these premium services, Coinbase generates recurring income from users who subscribe.
Custody Fees from Institutions
Coinbase isn’t just for individual users. They also serve big institutional clients like banks, hedge funds, and companies that need secure storage for their crypto assets. Coinbase offers specialized custody services that safely store large amounts of crypto. Institutions pay significant fees for this secure service, contributing another stream of revenue.
Earning Interest on Crypto
Did you know that Coinbase also earns money from the crypto you hold on their platform? When users leave their assets in their Coinbase account, Coinbase can lend out these assets or participate in staking, where they earn rewards. This lets Coinbase make money from interest, just like a traditional bank earns from lending out deposits.
Blockchain Infrastructure and Additional Services
Beyond just being an exchange, Coinbase is involved in blockchain infrastructure. They offer tools for developers, businesses, and even other companies in the crypto space. Staking services, cloud solutions, and other tech services allow Coinbase to diversify its income sources and stay competitive.
Coinbase’s revenue model is a mix of transaction fees, subscriptions, institutional custody, interest earnings, and infrastructure services.
