Coinbase has announced plans to convert an additional $500 million of its balance sheet into crypto assets after the exchange received approval from its board of management, according to CEO Brian Armstrong.
“We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings.”
Armstrong said that moving forward, the exchange will also invest 10% of its profit into cryptocurrencies.
“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.”
Coinbase: Committed to a Crypto-economy Future
The move is part of its recently updated investment policy to increase exposure to crypto assets as a long-term investor. Coinbase said on its official blog that the exchange is committed to the coming future, where crypto-economic transactions will be based on crypto assets.
“We believe in the crypto-economy, a future where economic transactions-buying, selling, spending, earning-will be based on crypto assets. Our products strive to make that vision a reality by making crypto trusted and easy to use for customers around the world.”
The purchase will also make Coinbase the first publicly traded company (to hold as part of its balance sheet- Bitcoin, Ethereum, Cardano, other proof of stake assets, DeFi tokens that are supported for trading on its platform.
Coinbase lists close to 90 different crypto assets, including its most notable listing involving Cardano’s native cryptocurrency ADA. The exchange is currently valued at approximately $52 billion, an almost 50% drop from its $100 billion valuation in April 2020 during its IPO launch.
Coinbase Customers To Influence Its Crypto Investment strategy
According to Coinbase, its future investment allocation will depend on its aggregate custodial crypto balances, meaning that customers’ investment trends will play a major role in the allocation.
“Our customers will drive our investment strategy. Our investments will be continually deployed over a multi-year window using dollar-cost averaging strategy.”
The long-term investment model is open to the increment in allocation, based on the fact that in the future, Coinbase wants to cater to its customers who will be increasing their crypto holdings as well.
“We believe that in the future, more companies will hold crypto assets on their balance sheets. We hope by incorporating more crypto assets into our own corporate finance practices, we can take another step towards building a more open crypto-economy.”
Notable personalities in the cryptocurrency space, including crypto exchange Shapeshift’s CEO Eric Voorhees, Forbes’ Financial analyst David Gohkshtein, and Bitcoin maximalist Peter McCormack have applauded the announcement. Bitcoin and crypto investor Lark Davis said:
“Time to buy some more Coinbase stocks I guess.”