What to know:

Coinbase (COIN) sold 12,652 ether ($25 million at the current price) in the fourth quarter, when it was valued about double the level now, according to Geoffrey Kendrick, the global head of digital assets research at Standard Chartered Bank.

In a note, Kendrick said he analyzed the crypto exchange's quarterly filings, which show it holds ether (ETH) under different categories, including investment and operational purposes. He estimates that about 80% of revenue generated by Base, Coinbase's Ethereum layer-2 blockchain, is profit.

Notably, the timing of the company's trades aligns with price movements, he said. Coinbase net bought in the third quarter, when ETH was trading at around $2,500, and net sold in the fourth, when the second-largest cryptocurrency reached $4,000. It's now about $2,000.

“The fact that they net bought in Q3 (when prices were low on average) and net sold in Q4 (higher average prices) tells me Coinbase acts like any risk-adjusting profit maximiser would do,” Kendrick wrote.

Coinbase said it sold some ether to fund operations, without saying how much was involved.

"Base earns ETH from sequencer fees, and the ETH we earn is primarily held for long term investment or used for operational expenses, including tax liabilities and reinvesting in growth via things like salaries, grants, acquisitions, and public goods funding," a spokesperson said in an email.

According to Kendrick's calculations, over the past three quarters, net ETH sales totaled 1,558, implying a pattern of strategic selling rather than accumulation. He reached his conclusion by subtracting Base’s profits in ETH from changes in Coinbase’s ETH holdings.

The spokesperson reiterated that the company doesn't generally take part in trading activities.

“As shared in our 10K: 'Crypto assets held for investment are primarily held long term ... we do not engage in regular trading of these assets but may lend them through Prime Financing or stake them.' Our ETH held for investment grew 20% over the course of 2024," the spokesperson said.

  This isn't the first time Coinbase has had to respond to suggestions it is selling the ether generated by Base. Last month a member of Base rejected speculation surrounding potential ETH sales saying the exchange had “accumulated $300M+ in ETH, which is more than 2x all of Base's ETH earnings over time.”