Coinbase, the largest cryptocurrency exchange based in the United States, revealed long-term plans to invest in crypto assets.
Coinbase will keep cryptocurrencies on its balance sheet
Coinbase CEO Brian Armstrong announced Thursday that the publicly traded cryptocurrency exchange received board approval to add $ 500 million in cryptocurrency to its balance sheet and to allocate 10% of its quarterly earnings to a diverse portfolio. of crypto assets in the future.
In a follow-up tweet, Armstrong stated that he wants the company to operate more of its business in cryptocurrencies. Coinbase believes that the world is moving toward a more crypto-centric economy, a future in which an increasing proportion of transactions will be based on crypto assets. The exchange appears to be leading by example, preparing for this future.
In a recent blog, CFO Alesia Haas revealed that Coinbase's latest movement marks are its long-term commitment to investing in cryptocurrencies:
“Our investments will be implemented continuously over a period of several years using a dollar cost averaging strategy. We are long-term investors and we will only sell in certain circumstances, such as the removal of an asset from our platform ”.
"This means that we will become the first publicly traded company to hold Ethereum, proof-of-stake assets, DeFi tokens, and many other supported crypto assets for trading on our platform, in addition to Bitcoin, on our balance sheet," he added.
The company may increase its allocation over time as the cryptocurrency markets and the industry mature.
According to a Wall Street Journal report, Coinbase has built up a $ 4 billion cash reserve, a kind of insurance fund to deal with potential regulatory hurdles, higher compliance costs, cyberattacks, or transaction reduction periods.
In April, Coinbase made history as the first cryptocurrency company to go public, reaching a valuation of $ 103 billion on the first day of trading. Rather than go the traditional IPO route, Coinbase listed directly, raising no money in the process.