Coinbase Will Purchase $500 Million Of Crypto to Add On Its Balance Sheet


Coinbase CEO Brian Armstrong said on Twitter
that board of Coinbase has given approval to the publicly traded cryptocurrency
exchange Coinbase to invest $500M of cash and cash equivalents for expenditures
cryptocurrency assets thereby adding it to the balance sheet. It has also
decided to place 10% of all future profits into cryptocurrency.
Coinbase
announced about this purchase just a day after its Japanese launch in
partnership with Mitsubishi UFJ Financial Group. According to the announcement
this will lead Coinbase to gain access to 40 million of Mitsubishi’s customer base
as part of their agreement. Coinbase's chief financial officer Alesia Haas she
added. "We will become the first publicly traded company to hold Ethereum,
Proof of Stake assets, DeFi tokens, and many other crypto assets supported for
trading on our platform, in addition to Bitcoin, on our balance sheet,". To
avoid creating conflicts of interest with its customers, Coinbase will trade on
third-party platforms or through its over-the-counter trading desk.
Coinbase has
been around since 2012 and it ranks fourth among all companies for Bitcoin
holdings. As per Bitcoin Treasuries, currently Coinbase is the
eighth-largest public company by Bitcoin (BTC) holdings on its balance sheet
and the largest crypto exchange by value of BTC held in its treasury.
In February as
it prepared to go public through direct listing Coinbase published an S-1
filing that shows it held around $365 million in crypto. Out of which $230
million was in Bitcoin $53 million in Ethereum, $49 million in stablecoins, and
$34 million in other crypto assets.
Other firms
who bought BTC
in April, Coinbase, which tapped the public markets, has helped companies including cloud software firm MicroStrategy and electric automaker Tesla make large crypto purchases. Within the last year MicroStrategy and Tesla bought their first BTC. Firms like MicroStrategy view the move as a way to protect capital from potential inflation.

Indrani bose
CBW - External Analyst
INDIA