Coinbase, the leading US trade organization, has announced intentions to add a half billion dollars of cryptographic value to its financial sheet.
Coinbase CEO Brian Armstrong stated that in a tweet that the Coinbase board authorized the crypto frenzy and added that Coinbase is also planning to invest 10 percent for every digital asset income.
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
Armstrong also stated that Coinbase wants to raise its share of earnings over time for Bitcoin buys.
Coinbase Enters the Ethereum, DeFi Markets
A blog post released by Coinbase on the same day says that the action would add Ether, DeFi tokens and proof-of-Stake assets as the first trading business in its balance sheet:
Towards that goal, we are announcing a change in our investment policy. We have committed to invest $500M of our cash and cash equivalents. Going forward, we will also allocate 10% of quarterly net income into a diverse portfolio of crypto assets. 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.
Our crypto asset investment allocation will be driven by our aggregate custodial crypto balances — meaning our customers will drive our 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.
The article said that future investments may be influenced by the holdings of its clients, indicating that Coinbase can add an asset to the balance sheet should users make large custodial deposits of a certain cryptocurrency.
In order to prevent conflicts of interest with its clients, Coinbase will operate on third-party platforms or its over-the-counter trading desk.
Coinbase’s Recent Bullish Developments
The announcement is coming only a day after Coinbase announced a collaboration with the Mitsubishi UFJ Financial Group (MUFG). According to the statement, Coinbase would also get about 40 million consumers access to Mitsubishi’s client base as part of its partnership.
Coinbase is entering the Japanese market via its collaboration with banking behemoth Mitsubishi UFJ Financial Group, the Japanese financial group (MUFG).
Coinbase stated in its statement on Monday that it is establishing Coinbase Japan in one of the biggest crypto-trading marketplaces as part of its worldwide plan. According to the announcement, the collaboration would provide Japanese clients with access to fiat on and off-ramp through Quick Deposit services from MUFG.
The exchange stated it would first enable the trading in the next few months of the five biggest crypto assets with additional assets, but has not given any particular names.
Coinbase also said the same day that it has raised a $4 billion war fund chest to ready for regulatory expenses and the upcoming winter storm.