Coinbase Adds $500 Million in Cryptocurrency to Its Balance Sheet… What Does That Mean?
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Answer Coinbase Adds $500 Million in Cryptocurrency to Its Balance Sheet… What Does That Mean?
Coinbase CEO Brian Armstrong announced via Twitter today that his publicly traded Nasdaq company has received Board approval to add $500 million in cryptocurrency to its balance sheet.
Not only that, but Coinbase will put 10% of all future profits into cryptocurrencies.
In February, as Coinbase was preparing for a direct listing on the Nasdaq, Coinbase published an S-1 file showing that it held $365 million in cryptocurrency, split between $230 million in Bitcoin, And $53 million in Ethereum, $49 million in stablecoins, and $34 million in other cryptocurrencies.
Although Coinbase’s holdings make it the fourth largest of all companies that own Bitcoin, two of the three companies that preceded it – cloud software company MicroStrategy and electric car maker Tesla – bought their first Bitcoin. Over the past year, Coinbase has been in the crypto arena since 2012.
Read:After announcing the search for specialists in the Blockchain and Crypto…Will Amazon finally enter the crypto market?
Why did Coinbase decide to store its assets in the form of cryptocurrencies?
Some believe that Coinbase, a cryptocurrency company, has a different view of its assets and balance sheet.
The company’s consecutive record-breaking quarterly profits, first reaching $800 million in the first quarter of 2021 and then $1.6 billion in the second quarter of 2021, convinced Coinbase’s board of directors that it had room to diversify its holdings.
Coinbase, which makes most of its money from transaction fees on its cryptocurrency exchange, benefited as trading volumes increased over the last quarter despite the collapse in cryptocurrency prices, as Bitcoin slipped from above $60,000 to $30,000.
According to the CEO of Coinbase:
Coinbase wants to run more of its cryptocurrency business.
For now, the balance sheet is still a mix.
Read:Analysis: The current Bitcoin accumulation movement is similar to what happened in mid-2018
In a statement, the founder of “Coinbase” hinted at the possibility that most of the company’s assets will become in the form of cryptocurrencies in the future.
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