Coinbase is the leading US exchange by trading volume. It has announced its plans to add $500 million in cryptocurrency to its balance sheet. In a tweet on Friday, Brian Armstrong, the CEO of Coinbase announced that the company’s board of directors have approved the cryptocurrency spending. They further added that the company is also planning to invest 10% of all profits made in the future in digital assets. Armstrong also stated that Coinbase expects to increase over time the percentage of profits that it allocates for all the cryptocurrency purchases.
Coinbase published a blog post on the same day. The post announced that the move would make the exchange the first publicly traded company to hold Ether (ETH) proof-of-stake assets on its balance sheet. Ether is a decentralized finance token. The announcement underscores Coinbase’s long-term commitment to investing in the crypto space, saying:
“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.”
Coinbase’s Rapid Expansion
The post further says that future investments may be advised on the number of customer holdings, suggesting that Coinbase can add an asset to the balance sheet if users deposit a significant custodial amount of a given cryptocurrency. Coinbase will conduct its transactions on third-party platforms or over-the-counter desks. It will do this so that it can avoid any kind of conflicts of interest with its customers.
At present, Coinbase is the eighth largest public company by the number of bitcoins (BTC) on its balance sheet. It is also the largest cryptocurrency exchange by the value of BTC in the Treasury according to Bitcoin Treasuries. Besides, Coinbase recently completed its Japan launch in partnership with Mitsubishi UFJ Financial Group. The news about the company’s latest expenditures on cryptocurrency came just a day after this launch. According to this announcement, as part of the deal, Coinbase will also gain access to Mitsubishi’s 40 million customer base. Again, on the same day, the firm announced that it had amassed $4 billion in cash. It is preparing for regulatory spending and a possible crypto winter.
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