Author of the original text: The Kaiko Research Team
Original text compiled by: TechFlow
As North America quickly resolves tariff disputes, the global market is gradually recovering stability. At the same time, the United States is actively exploring the establishment of its own sovereign wealth fund, while crypto regulator David Sacks is optimistically predicting that digital assets are about to enter a "golden age".
This week, we will delve into the following aspects:
Coinbase's market performance before the earnings release
Significant growth in USDC trading volume on the Binance platform
Trends in Altcoin market liquidity
How Crypto Data Becomes a Key Tool for Predicting Earnings Performance
Coinbase Earnings Preview: Market Data Provides Early Insights
Coinbase will release its Q4 2024 earnings report this Thursday (February 13). Prior to this, we can gain preliminary clues about its performance by analyzing market data. While analysts' earnings expectations and outlooks will directly impact the stock price, crypto market data is often an important leading indicator of the exchange's health.
Data shows that Coinbase's weekly trading volume in Q4 reached its highest level in two years. This trend indicates that the platform benefited greatly from the market rebound after the US election.
In recent years, Coinbase's revenue sources have become increasingly diversified, with its "Subscription and Services" business (including staking rewards, custody fees, and USDC interest) accounting for a significant portion of its total revenue.
However, trading revenue remains Coinbase's core business. Except for one quarter in 2023, trading revenue has consistently accounted for more than 50% of total revenue.
It is worth noting that subscription and service revenue is closely related to the overall activity of the crypto market and does not diversify risk. Therefore, in the event of low trading activity or a decline in market prices, subscription and service revenue will also be significantly affected.
For example, in Q3 2024, Coinbase's blockchain rewards revenue declined by 16% due to the drop in ETH and SOL prices.
Kaiko's blockchain monitoring tools reveal that net flows on the Ethereum beacon chain declined in Q4 2024. As the second-largest ETH staking entity after Lido, Coinbase is a major contributor to this downward trend. Data shows that over the past six months, Coinbase's market share in the staking market has decreased by 3.8%, with a net outflow of 1.29 million ETH during this period.
This trend indicates that although Coinbase still holds an important position in the staking market, its market share is gradually being eroded by other competitors. This may have an adverse impact on its long-term revenue growth and competitiveness.
While the price increase of ETH and SOL during the quarter to some extent mitigated the impact of the staking decline, the overall data still suggests that Coinbase's blockchain rewards revenue may decline in Q4. Particularly in the ETH staking market, Coinbase's market share has decreased by 3.8%, directly impacting its staking-related revenue.
Coinbase's business agreement with Circle allows it to generate a stable revenue stream from USDC-related income. It is worth noting that Circle's new partnership with Binance and record-breaking USDC trading volume may to some extent offset the impact of the decline in staking revenue. This provides an additional revenue buffer for Coinbase, especially in the face of pressure on staking and trading revenue.
Retail traders, as the users paying the highest trading fees, have seen their trading volume share drop significantly from 40% in 2021 to the current 18%. Although Coinbase's subscription business (such as blockchain rewards and custody services) has grown, the loss of retail traders still puts significant pressure on its trading revenue.
Since reaching a peak in mid-2023, Coinbase's "take rate" (the proportion of revenue obtained from retail traders) has fallen to its lowest level since the Terra Luna collapse in the first half of 2022.
The decline in revenue comes at a time when competition in the US market is intensifying, with some platforms significantly reducing trading fees to attract users, further exacerbating the pressure on platforms like Coinbase.
Although Coinbase remains one of the most liquid exchanges in the US, its fee structure (more favorable to market makers than takers) is relatively stable, but the reduction in retail traders has undoubtedly increased the pressure on this revenue source.
Furthermore, although Coinbase has continuously expanded its product range and gained more synergies across its products, its new asset listing activity has slowed significantly due to the strict regulatory environment in the US.
The chart shows that since the SEC filed lawsuits against Binance.US and Coinbase in June 2023, the number of active trading pairs on both platforms has declined significantly. However, if the regulatory environment improves in the future, Coinbase may accelerate its listing pace, which could also enhance its appeal to retail traders.
Data Points
USDC Trading Volume Hits Record High: Binance's Dominance
Binance has now become the world's largest USDC trading market, with a weekly trading volume of $24 billion in January 2025, accounting for 49% of global USDC trading volume. This is the highest market share since September 2022. This significant growth is attributed to Binance's strategic partnership with Circle at the end of 2024, aimed at driving wider USDC adoption.
In contrast, Bybit's market share has declined significantly, from 38% in October 2023 to the current 8%.
At the same time, the Bullish platform has risen rapidly, with a 32% market share, becoming one of Binance's main competitors.
This change in market dynamics is also reflected in the intensified competition between stablecoins. Data shows that the proportion of newly listed USDT trading pairs has dropped from 77% in 2023 to below 63% in 2024, and has further declined to 50% so far in 2025.
It is worth noting that Euro-backed trading pairs are gradually gaining market attention. This may indicate that the EU market is experiencing a recovery with the implementation of the MiCA regulation in 2024. For more detailed analysis on European market trends, please refer to our latest research report.
Altcoin Liquidity: Centralization Trend and the Rise of Small Tokens
Since the US election, the market's outlook and sentiment towards Altcoins have improved significantly. This positive sentiment has driven a surge in new Altcoin ETF applications and a significant increase in trading activity.
Data shows that the daily liquidity metric for Altcoins (measured by the 1% market depth of the top 50 Tokens) has nearly doubled since September 2023, reaching $960 million.
However, the distribution of liquidity is not balanced, and it is still highly concentrated in the top 10 Altcoins, which account for 64% of the total market depth. In contrast, the liquidity share of medium-cap Tokens (ranked 20-30) has declined, while small-cap Tokens (ranked 50) have shown unexpected growth, with their liquidity share even exceeding that of the higher-cap group (ranked 40).
However, market liquidity remains highly concentrated, with the top 10 Altcoins accounting for 64% of the total market depth. In contrast, the market share of medium-cap Tokens (ranked 20-30) has decreased, while small-cap Tokens (top 50) have unexpectedly achieved growth, with their liquidity share even exceeding that of the higher-cap Token group (top 40).
