Coinbase Commits $500 Million of Cash and 10% of Quarterly Income to Invest in Bitcoin, Ether, DeFi & other Cryptocurrencies
Cryptocurrency exchange Coinbase has announced its plan to put Bitcoin and cryptocurrency on its balance sheet.
Finally, after Square, Tesla, and other companies, Coinbase is also ready to commit to the future where crypto assets will be the standard of economic transactions, meaning buying, selling, spending, and earnings will all be based on crypto.
“We believe in the cryptoeconomy. We believe in a future where economic transactions will be based on crypto assets. And we’re committing to that future.”
According to the official announcement, Coinbase has committed to invest $500 million of its cash and cash equivalents in crypto.
Also, going forward, the company will further allocate 10% of its quarterly net income into a diverse portfolio of cryptocurrencies.
“We may increase our allocation over time as the cryptoeconomy matures. We believe that in the future, more and more companies will hold crypto assets on their balance sheet,” said Alesia Haas, Coinbase Chief Financial Officer.
We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings. And we'll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the cryptoeconomy matures.
— Brian Armstrong (@brian_armstrong) August 19, 2021
But unlike other companies, Coinbase will not limit this allocation to just Bitcoin but would also hold Ethereum, Proof-of-Stake (PoS) assets, DeFi tokens, and other crypto assets for the long term. These investments will be deployed over a multi-year time period using a dollar-cost averaging strategy.
“Our crypto asset investment allocation will be driven by our aggregate custodial crypto balances — meaning our customers will drive our investment strategy,” Haas added.
As we reported, Coinbase accumulated $4.36 billion in cash as of June 30, four times higher than what it had at the end of 2020. The company is stockpiling cash to prepare for “crypto winter” and a stricter regulatory regime.