Coinbase CEO Brian Armstrong announced on Twitter on Friday that the company, which is traded on Nasdaq, has received board approval to add $500 million worth of cryptocurrencies to its balance sheet. Not only that, but it will invest 10 percent of future earnings in cryptocurrencies.
In February, while preparing to go public through a direct listing, Coinbase filed an S-1 registration statement showing that it holds cryptocurrencies worth $365 million. Of that, $230 million was in Bitcoin, $53 million in Ethereum, $49 million in stablecoins, and $34 million in other crypto assets.
Although the report was enough to rank Coinbase fourth among all companies holding Bitcoin, two of the three companies ahead of it, cloud software company MicroStrategy and electric vehicle manufacturer Tesla, purchased their first Bitcoins in the last year. Coinbase has been around since 2012. Some believed that the crypto-native company should have accumulated more during that time, although accounting rules and treasury management principles may have made that imprudent.
However, record quarterly profits, first of $800 million in the first quarter, then $1.6 billion in the second, convinced Coinbase’s board that there is room to diversify its holdings.
The crypto exchange, which earns most of its money from transaction fees, benefited from high trading volumes in the last quarter despite the decline in cryptocurrency prices.
According to Armstrong, the company would like to gradually lead more business in the crypto industry.
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