We’ve been adding new product features like 10x leverage. We did that in Q4. I think we’ve had about – it’s about $16 billion in notional volume traded on international exchange in Q4. So it’s been really good progress on that. Same thing, by the way, for Coinbase financial markets in the U.S., we got license to trade U.S. futures, which has been really great. And so, yes, I think our daily milestone that we just surpassed actually today, it was $700 million in a 24-hour period that was on the international exchange. So really great early start. I think that clients are going to continue to want to prefer a trusted counterparty that’s following the rules. Coinbase is the brand that can help them do that. And derivatives trading is actually about 75% of all crypto trading by volume at least.
The take rate is lower on it, but it is the majority of volume. And so I’m just really glad that we’re now starting to build our business in that area. Alesia, anything you want to add on take rates?
Alesia Haas: Sure. As Brian said, we are early days in derivatives. We’re excited about the progress that we are just getting started. As such, our current goal is to really gain market share. We are offering tiered pricing over time. But right now, it’s going to be competitive to build liquidity and attract users and we’ll experiment and adjust as we scale.
Operator: Your next question comes from the line of Benjamin Budish with Barclays. Your line is open.
Benjamin Budish: Hi. Good evening and thanks for taking the question. I wanted to follow up on one of the earlier on the Prime business. Can you maybe do a little bit of a dive into what specifically you’re doing there? Obviously, I would assume there’s some kind of execution. But what are the sort of services you provide? How are you monetizing them? And can you just confirm that any revenues through Prime or also reported or confirm or not confirm that they are reported within the institutional volume metric that you give?
Alesia Haas: Why don’t I start with this? So Coinbase Prime is our one-stop shop for institutions. It comprises a suite of products, including custody, trading, financing, those are the large three that are in that umbrella. When you look at our institutional transaction revenue, that is largely the trading business. We separately disclosed custodial fee revenue, and the financing business is largely in other subscription and services right now because it is still nascent and growing. We haven’t broken it out as a separately disclosed line item.
Operator: Your next question comes from the line of Pete Christiansen with Citi. Your line is open.
Peter Christiansen: Thank you. Good evening. Alesia, I’m a little surprised the sales and marketing is expected to be flattish, I guess, into Q1. I would think the status of the asset class, international business picking up, Coinbase would want to lean in a little bit more there. I was just wondering if you could talk to those dynamics. Maybe you’re seeing different mix shift that’s impacting it between institutional or retail or maybe you’re seeing better marketing efficiencies. Just wondering if you can walk us through that progression and how you’re seeing the setup for this year.
Alesia Haas: Thanks, Pete. So a large part of our sales and marketing spend is actually in brand spend and we have seasonality with an NBA contract. And so what you see is a shift in spend between Q4 and Q1, where we will spend materially less on that NBA contract when we direct that spend to other areas, which is leading to a slightly down guide for Q1 versus Q4, but we are reinvesting. We are really proud of our marketing efforts, and I might call Emilie and to answer some of those questions, but we really feel like we hit our stride with marketing over the last year and are continuing to lean in and invest where we see strong ROI and strong return on those investments.
Emilie Choi: I agree fully. The marketing investments have been very high ROI, that’s one of the things that we’ve demanded since we’ve implemented the program. And I think that we’re going to continue to test the boundaries of it, especially as we expand more and more into policy marketing to get our messages across to policymakers.
Operator: Your next question comes from the line of Bo Pei with US Tiger Securities. Your line is open.
Bo Pei: Hi, Management. Thanks for taking my questions. So some question on the retail take rate. So with the recent approval of Spot Bitcoin ETFs, most people believe crypto is now becoming a more mature asset class. And typically, as a new asset class becomes more mature, one should expect trading this as to become cheaper. So do you think crypto investors have become more sophisticated now? And do you see more traders migrating to the Coinbase advanced platform? And do you expect the trading take rate to gradually decline to below 1% in this crypto cycle like in the last 1.5 years or 2 years? If this happens, do you believe the volume increase can more than offset the take rate decline? Thank you.
Alesia Haas: Thanks, Bo. I’ll share. Since we went public, we’ve received a question on fee rate and fee rate compression or cannibalization every quarter. And we have yet to see that phenomenon on our platform, and we have yet to see that as a result of the ETFs as well. As we shared, even in quarter-to-date Q1, we’ve seen net inflows across both retail and institutional, and we have not seen any shift in our customer behavior as a result of the EPS, all we’ve seen is ETFs being a net add to the industry net positive for Coinbase, net positive for the industry overall with more engagement across the board with both our retail and institutional clients. We’ve shared over time, we agree with you with the thesis that as you see commoditization, you should see fees come down.
