Elon Musk’s Tesla Used Coinbase OTC Desk to Broker the $1.5 Billion Bitcoin Purchase
Over the past year, institutional demand has been a blessing to the crypto industry. With more public firms showing interest in digital assets, the market has swollen in size.
However, what many institutions seem to have in common is their port of entry into the crypto market – Coinbase.
Coinbase Wins Another Institutional Client
Coinbase had been behind Tesla’s purchase of $1.5 billion in Bitcoin, which the auto manufacturer announced last week, The Block reports. Citing sources familiar with the exchange, the news source confirmed that Coinbase had begun the purchasing spree through its over-the-counter (OTC) trading desk in early February.
The source added to The Block that Coinbase’s brokerage service now counts over five Fortune 500 companies as clients. With the exchange looking to go public later this year, its clientele definitely gives it additional credibility to seek a solid offering.
Did MicroStrategy Have a Hand?
Coinbase has been doing some significant work when it comes to helping institutions improve their exposure to cryptocurrencies. Last year, Coinbase was reported to have facilitated British asset management firm Ruffer Investments with their $750 million Bitcoin purchase, marking the latter’s focus on alternative investments as it looked to hedge against devaluation.
Jonathan Adkins, a company representative, said Ruffer had made the purchase through One River Digital, an offshoot of top volatility hedge fund One River Asset Management. One River eventually contacted Coinbase, which brokered the investment over several days.
The San Francisco-based exchange has also confirmed that it helped business intelligence firm MicroStrategy with its Bitcoin investment. MicroStrategy began purchasing Bitcoin last July, committing $425 million in less than a month. Pumping its brokerage and custody service, Coinbase confirmed in an October blog post that it had indeed been the facilitator of MicroStrategy’s purchase.
MicroStrategy has been on a tear since, raising $650 million in December to facilitate a Bitcoin purchase and buying $10 million more of the asset last month, and raising $1 billion more to buy. It is unclear whether the company went through Coinbase since then.
The move from Tesla isn’t so surprising. Last year, Michael Saylor, MicroStrategy’s chief executive, had offered to “share his playbook” with Tesla CEO Elon Musk when the latter showed openness to purchasing Bitcoin. While any communication between the two, eventually leading to last week’s purchase, seemed to have happened privately.
Coinbase Wants To Go Public
Coinbase is considered one of the most successful crypto exchanges in the world. With five Fortune 500 companies on its list of clientele, the company is also looking to go public later this year. The famous crypto exchange has $90 billion worth of assets in cryptocurrencies alone.
The crypto exchange seems to attract some of the most famous institutional investors looking to make huge crypto bets.
As part of its enormous stake in the crypto industry, the crypto unicorn had $20 billion worth of cryptocurrency assets in custody for its clients as of November 2020.