Coinbase, one of the largest cryptocurrency exchanges, is reported to have sold 12,652 Ethereum (ETH) in Q4 2024, according to Geoffrey Kendrick, Head of Digital Assets Research at Standard Chartered.

This sale, worth approximately $25 million at current prices, has sparked discussions about whether Coinbase is selling ETH for strategic profit-taking or simply covering operational expenses.

Kendrick analyzed Coinbase’s quarterly reports and found that the exchange holds ETH in various categories, including investment funds and operational reserves. He also identified a clear pattern: Coinbase tends to buy ETH when prices are low and sell when they rise.

For example, in Q3 2024, when ETH was trading around $2,500, Coinbase was a net buyer. But in Q4, when ETH rose to $4,000, the exchange sold more than it bought.

Kendrick believes this indicates Coinbase is focused on maximizing profits while managing risk, rather than simply accumulating ETH for the long term.

Coinbase responds

In response, Coinbase acknowledged selling some ETH but explained that the funds were used for operational costs rather than trading for profit. A company spokesperson stated that Base, Coinbase’s Ethereum layer-2 blockchain, earns ETH through sequencer fees.

While most of this ETH is retained as a long-term investment, a portion is used to cover expenses such as salaries, buybacks, taxes, and grants.

Coinbase also emphasized that it is not a trading-focused entity. The company pointed out that its ETH holdings increased by 20% in 2024, reinforcing the claim that it does not actively trade crypto but may lend or stake assets when necessary.

This is not the first time Coinbase has faced scrutiny over its ETH holdings. Just last month, a Base representative dismissed rumors of a large ETH sale, stating that Coinbase had accumulated over $300 million worth of ETH—twice the earnings from Base.

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