While unveiling intentions to add half a billion dollars worth of crypto to its balance sheet, Coinbase CEO Brian Armstrong anticipates the percentage of income spent on cryptos to climb over time.
In an August 20 tweet, Coinbase CEO Brian Armstrong revealed that the business’s board of directors had approved the crypto spending spree, adding that the company also wants to invest 10% of all earnings earned into digital assets in the future.
Coinbase’s CEO also stated that the company hopes to gradually raise the percentage of profit it devotes to bitcoin acquisitions.
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
Coinbase announced the move in a blog post the same day, claiming that it will make it the first publicly traded corporation to hold Ether, DeFi tokens, and Proof-of-Stake assets on its balance sheet.
Coinbase’s commitment to making long-term investments in the crypto sector is emphasised in the release, which states:
“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.”
The statement goes on to say that the company’s future investments may be influenced by its customers’ holdings, implying that if users make big custodial deposits of a crypto coin, Coinbase may add an asset to its balance sheet.
To avoid generating conflicts of interest with its customers, Coinbase will trade on third-party platforms or through its over-the-counter trading desk.
Coinbase is presently the eighth-biggest public firm by Bitcoin holdings on its balance sheet, and the largest crypto exchange by the value of BTC held in its treasury, according to Crypto Treasuries.
The revelation of fresh crypto spending comes just a day after Coinbase launched in Japan in collaboration with Mitsubishi UFJ Financial Group (MUFG). According to the release, Coinbase would have access to Mitsubishi’s 40 million-strong customer base as part of the arrangement.
Coinbase also revealed on the same day that it has established a $4 billion cash reserve to prepare for regulatory costs and the next crypto winter.