In Brief:
- Coinbase has announced its intentions to add half a billion dollars worth of cryptocurrency to its balance sheet.
Coinbase, which is a cryptocurrency exchange serving retail investors, announced on 20th August to add crypto to its balance sheet. Brian Armstrong, CEO of Coinbase announced that their board has approved to add $500 million in crypto assets. He further added that the company wants to invest 10% of all earnings earned into digital assets in the future.
Armstrong also claimed that the company intends to steadily increase the share of profit it devotes to bitcoin purchases.
The announcement emphasises Coinbase’s commitment to making long-term investments in the crypto sector, stating: “Our investments will be continually deployed over a multi-year window using a dollar cost averaging strategy. We are long term investors and will only divest under select circumstances, such as an asset delisting from our platform.”
Armstrong also stated that the company plans to gradually raise the percentage of profit allocated to bitcoin purchases.
Back-to-back record quarterly profits, up to $800 million in Q1 and then $1.6 billion in Q2. This persuaded Coinbase’s board of directors that there is an opportunity to diversify the company’s assets.
The statement goes on to say that the company’s future investments may be influenced by its customers’ holdings. This implies that if users make big custodial deposits of a crypto coin, Coinbase may add an asset to it.
More on Coinbases’ Agenda
Coinbase is presently the eighth-biggest public firm by Bitcoin holdings on its balance sheet. It is also the largest crypto exchange by the value of BTC held in its treasury, according to Crypto Treasuries.
The new crypto spending came just after Coinbase announced a partnership with Mitsubishi UFJ Financial Group to operate in Japan (MUFG). As part of the deal, Coinbase will have access to Mitsubishi’s 40 million-strong customer base, according to the press release.
Coinbase also revealed on the same day that they’ve established a $4 billion cash reserve to prepare for regulatory costs.
Over time, the company aims to “conduct more of our business in crypto,” according to Armstrong. For the time being, he remarked, “It’s still a mix.”
