Coinbase is doubling down on its crypto portfolio with half a billion-dollar addition to its balance sheet

Coinbase is doubling down on its crypto portfolio with half a billion-dollar addition to its balance sheet

Coinbase is doubling down on its investment with a $500 million commitment towards buying into cryptocurrency assets. This is according to an official announcement made by the company’s C.E.O Brian Armstrong on Friday morning, just a day after the company announced its entrance into the Japanese market.

Expressing his hope in the company henceforth operating more of its business in crypto, the C.E.O. disclosed that Coinbase had recently received approval from the board to purchase over $500M of crypto on its balance sheet to add to its existing holdings. He further added that the company would set aside 10% of all profit going forward into crypto, a percentage he hoped would keep growing over time as the crypto economy matures.

Customers-driven Investment strategy

The company in its blog further asserted that its crypto investment allocation would be driven by its aggregate custodial crypto balances which meant that its customers would be the lead drivers in its investment strategy.

“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. All trades will be executed via our over-the-counter desk or away from our exchange to avoid any conflict of interest with our customers.”  

Although the company failed to disclose which assets it would be purchasing, an S-1 regulatory filing in February disclosed that the company had been holding various crypto assets since 2012 including Ethereum, Proof of Stake assets, DeFi tokens and Bitcoin which added up to about $731M. Friday’s announcement will essentially make the Giant Crypto Exchange the first publicly-traded company to openly announce its move to hold crypto assets supported for trading on its platform in its balance sheet.

More Investments In Crypto

The company which has Approximately 68 million verified users, 9,000 institutions, and 160,000 ecosystem partners in over 100 countries also vowed to increase its allocation over time as the crypto-economy matures in the belief that more institutions would hold crypto assets on their balance sheets.

Coinbases announcement comes a week after the company released a commendable Q2 earnings report which is attributed to a rise in demand for NFTs, DeFi which points to the continued upsurge in institutions betting on rising prices double down on crypto-related assets.