Coinbase’s assets under management (AUM) exceed $420 billion, making the cryptocurrency exchange more valuable than the 21st largest bank in the United States. This highlights the continuous growth of the crypto industry.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) in the world based on trading volume, currently holds over $420 billion worth of digital assets on behalf of its users.
According to Brian Armstrong, the co-founder and CEO of Coinbase, the $420 billion AUM would place Coinbase as the 21st largest bank in the US. In a post on February 7th, Armstrong stated, “If you think of Coinbase like a bank, we now hold about $0.42T in assets for our customers, which would make us the 21st largest bank in the US by total assets, and growing.” He further added, “If you think of us more like a brokerage, we’d be the 8th largest brokerage today by AUM.”
Coinbase’s $420 billion AUM is more than three times the $112.9 billion worth of assets managed by the New York Community Bancorp (NYCB), which currently holds the position as the 21st largest bank in the US.
In the fourth quarter of 2023, the NYCB reported a quarterly loss of $260 million after acquiring the collapsed Signature Bank, known for its crypto-friendly services, in 2023.
On the other hand, Coinbase recorded a net profit of $273 million for the same quarter. This marked the first positive income quarter since the fourth quarter of 2021, as stated in the exchange’s shareholder letter.
Coinbase CEO, Armstrong, believes that cryptocurrency will bring together various financial services under a single primary financial account. He wrote, “With crypto, the line between these categories is blurring. In the updated financial system, you will have a single primary financial account which serves all these functions. A greater percentage of global GDP will run on more efficient crypto rails over time. We’ll have sound money, lower friction transactions, and greater economic freedom for all.”
However, Chintan Turakhia, senior director of engineering at Coinbase, suggests that the industry needs to address the most pressing friction points in order to promote mainstream adoption. These points include simplifying the process of setting up a wallet, reducing transaction fees, and making it easier to buy blockchain-native tokens for transactions on a network.