Digital currency platform Coinbase is adding $500 million of crypto assets to its balance sheet in addition to 10 percent of its future quarterly profits, a move approved by its board, according to Coinbase on Friday (August 20).
Coinbase CEO Brian Armstrong said in a series of tweets that the new investments will add to the company’s existing holdings, although the breakdown of asset purchases wasn’t revealed despite requests over Twitter, where the announcement was first made.
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
The publicly traded platform said it will allocate the funds based on what customers are holding. The company also said it will invest across several years using a dollar-cost averaging strategy, which means investing the same percentage at scheduled intervals.
Armstrong said he anticipates the percentage of investment will expand “as the crypto-economy matures.”
In a blog post by Coinbase Chief Financial Officer Alesia Haas, she said the company’s updated investment policy depicts the company’s conviction regarding crypto adoption and value.
“This means 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,” Haas said in the post.
“We are [long-term] investors and will only divest under select circumstances, such as an asset delisting from our platform,” Haas wrote.
Coinbase is among several companies — such as Tesla and MicroStrategy — tacking crypto investments onto their balance sheets. As it stands, Coinbase holds an estimated $256 million worth of bitcoin, a CNBC report stated, citing Bitcoin Treasuries.
The platform’s second-quarter earnings report came in higher than analysts’ forecasts, with revenue of $2.2 billion against the anticipated $1.78 billion. The Silicon Valley company has clients that include Elon Musk as well as his companies Tesla and SpaceX, according to Markets Insider. Coinbase also has 10 of the 100 biggest hedge funds as clients.