Coinbase plans to invest an additional $ 500 million in cryptocurrencies

Coinbase reaffirms its confidence in cryptocurrencies

The news was announced today in an official statement posted on the Coinbase blog. The company’s board of directors has approved a plan to invest $ 500 million in cryptocurrency.

“We believe in the crypto-economy, which is a future where economic transactions – buying, selling, spending, earning – will be based on digital assets. Our products strive to make this vision a reality by making cryptocurrencies reliable and easy to use for customers around the world, ”said Alesia Haas, Chief Financial Officer of Coinbase.

Today, Haas says it realizes that the majority of financial transactions by Coinbase, and therefore other companies around the world, “remain heavily weighted in fiat.” She believes that the Californian company has its role to play “to promote the adoption and use of crypto-currencies” and must lead by example by adapting itself “the way of doing its business”.

This is the reason why Coinbase does not want to stop at this gross purchase of half a billion dollars. Going forward, the publicly traded company plans to reinvest 10% of its quarterly profits in different digital assets. Coinbase CEO Brian Armstrong is hopeful that over time and as the cryptocurrency ecosystem grows, that percentage continues to rise.

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

According to the Crypto Treasuries website, Coinbase is currently the fifth largest publicly traded company in terms of the amount of Bitcoin (BTC) held in its treasury. With this investment, the exchange would be propelled to third place in this ranking, behind Tesla and MicroStrategy.

👉 On the same theme – Coinbase allows its US customers to buy cryptocurrency with PayPal

An investment strategy driven by its clients

Coinbase’s investment plan calls for future purchases to be determined by the cryptocurrency holdings that customers of the platform have. In other words, all cryptocurrencies listed on the exchange will be likely to appear on the company’s balance sheet.

“The allocation of our cryptocurrency investments will be determined by the overall balances on deposit, meaning our clients will determine our investment strategy,” said Alesia Haas, CFO of Coinbase.

This will make Coinbase the first publicly traded company to hold Ether (ETH) or various decentralized finance (DeFi) tokens on its balance sheet in addition to Bitcoin.

In order to avoid creating conflicts of interest with its customers as much as possible, Coinbase’s purchases will be made on third-party platforms or through its over-the-counter exchange office.

One thing is certain, Coinbase’s investment ambition is for the long term. According to Alesia Haas, this investment plan is comparable to “a dollar cost averaging (DCA) strategy”, or recurring purchase in French, a strategy very popular with holders. Furthermore, the company is not determined to part with the cryptocurrencies it owns, except in special circumstances such as the removal of the asset in question from the platform.

👉 To go further – The Coinbase platform launches in Japan in collaboration with a large banking group

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About the Author: Lilian Aliaga

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Freelance writer located between Paris and Toulouse. I want to share my passion for the world of cryptocurrencies with as many people as possible. I am also interested in technical analysis and trading.
All articles by Lilian Aliaga.

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