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Coinbase, the leading US crypto exchange, recently revealed plans that will significantly increase the amount of cryptocurrencies in its own portfolio. According to Brian Armstrong, the exchange’s CEO, Coinbase’s board approved a massive crypto spending spree. Armstrong announced this in a tweet earlier today, August 20th, noting that the largest US crypto platform plans to invest 10% of all profits made in the future into digital assets.
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
Not only that, but Armstrong also hinted that Coinbase hopes to further increase the percentage of profit that will be used for crypto purchases.
The exchange confirms its CEO’s words
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Coinbase published a blog post of its own, confirming Armstrong’s announcement, and stating that the move will allow it to be the first publicly traded firm to hold ETH, DeFi tokens, as well as PoS assets as part of its balance sheet.
Coinbase also used the announcement to point out its dedication to long-term investments in crypto, saying that the investments will be continually deployed over multiple years. It plans to use the DCA (Dollar Cost Averaging) strategy, which is one of the most powerful and effective investment strategies. The exchange emphasized that it is a long-term investor and that it will only divest under very specific circumstances, such as if some asset gets delisted from its platform.
Coinbase might invest in other assets in the future
As for its future investments, the exchange left open the possibility of having them informed by its customers’ own holdings. In other words, new assets may find their way into the exchange’s balance sheet, if its users make significant custodial deposits of that specific asset.
To avoid any doubt or suspicions regarding volumes, Coinbase decided to make its trades on third-party platforms, or through its own OTC trading desk. That way, it won’t enter a conflict of interest with its own users.
At the time of writing, Coinbase is the eighth-largest public company based on Bitcoin holding, but also the largest crypto exchange based on the value of BTC in its treasury.