Coinbase CEO Reveals $500 Million Bitcoin, Ethereum And Crypto Bombshell As The Market Price Breaks $2 Trillion
Coinbase, the major U.S. bitcoin and cryptocurrency exchange that made a much-hyped Nasdaq debut earlier this year, has revealed it plans to add $500 million worth of crypto to its balance sheet.
The bitcoin and ethereum price, combined making up more than half of the $2 trillion crypto market, have surged this year, sparking a huge rally in many smaller cryptocurrencies (subscribe now to Forbes' CryptoAsset & Blockchain Advisor and discover crypto blockbusters poised for 1,000% gains.)
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"We recently received board approval to purchase over $500 million of crypto on our balance sheet to add to our existing holdings," Coinbase chief executive Brian Armstrong announced via Twitter. "And we'll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the crypto-economy matures."
In a blog post, the company, which now boasts a market capitalization of $52 billion, said it will "become the first publicly-traded company to hold ethereum, proof of stake assets, decentralized finance (DeFi) tokens, and many other crypto assets supported for trading on our platform, in addition to bitcoin, on our balance sheet."
Armstrong indicated Coinbase eventually plans to convert far more of its operating capital and assets to bitcoin, ethereum and other cryptocurrencies. Earlier this month, Coinbase said it brought in more than $2.2 billion in its second quarter, up from just $186 million during the second quarter of last year.
"Hopefully over time we can operate more of our business in crypto, today it is still a mix," Armstrong said.
Yesterday, it was reported Coinbase has stockpiled around $4 billion in cash to prepare for a possible regulatory crackdown or a market downturn, known as a "crypto winter," since listing shares in April.
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"We want to ensure that we maintain those cash reserves so that we can continue to invest and continue to grow our products and services in the event that we go into a crypto winter," Coinbase chief financial officer Alesia Haas told the Wall Street Journal.
Earlier this year, Elon Musk's electric car company Tesla became the biggest company to add bitcoin to its balance sheet, buying $1.5 billion worth of the cryptocurrency. Tesla's bitcoin holdings, even after the company said it sold $200 million worth in order to test market liquidity, is now thought to be worth $2 billion.
Others have since followed suit, with business intelligence software company Microstrategy continuing to accumulate bitcoin since it kicked off the trend this time last year. Microstrategy, led by chief executive and outspoken bitcoin bull Michael Saylor, has now spent $2.7 billion on bitcoin—thought to now be worth around $5 billion.Source