Coinbase future profits in crypto

coinbase future profits in crypto

the vision of wanting to operate only in cryptocurrency and no longer use fiat currencies.

Coinbase and the new investment policy in cryptocurrency

Listed on the Nasdaq since April 14, 2021, and with over 68 million verified users, Coinbase is a valuable behemoth for the mass adoption of cryptocurrencies.

Not only that, the platform laments that all corporate financial transactions such as paying suppliers, employees, or investing corporate money remain heavily weighted in fiat.

That’s why the decision to update thispolicy of investing heavily in cryptocurrenciesseems like it could become the perfect example to push thecrypto-economy into corporate practices as well.

In this regard, Coinbase describes the following:

“We have committed to invest $500M of our cash and cash equivalents.

Although Coinbase is a crypto-native company, it holds fewer digital assets compared to MicroStrategy and Tesla, two companies that the exchange has helped with making Bitcoin purchases.

In terms of revenue, Coinbase beat analyst estimates in Q2, generating $2.23 billion compared to the forecast of $1.78 billion. The firm’s net profit resulted in $1.6 billion, a 4,900% increase compared to the same period last year.

The crypto exchange has benefitted from high trading volumes over the last quarter through its transaction fees, with the explosive rally and a crash that followed.

Coinbase has announced a change in its investment policy, with a commitment to invest $500 million of its cash and cash equivalents in cryptocurrencies.

Coinbase future profits in crypto

We are long term investors and will only divest under select circumstances, such as an asset delisting from our platform.”

The post adds that future investments may be informed by its customers’ holdings, suggesting Coinbase may add an asset to its balance sheet should users make significant custodial deposits of a given crypto cryptocurrency.

Coinbase will make its trades on third-party platforms or via its over-the-counter trading desk to avoid creating conflicts of interest with its customers.

According to Crypto Treasuries, Coinbase is currently the eight-largest public company by Bitcoin holdings on its balance sheet, and the largest crypto exchange by value of BTC held in its treasury.

The news about new expenditures on crypto comes just a day after Coinbase completed its Japanese launch in partnership with Mitsubishi UFJ Financial Group (MUFG).

Coinbase future profits in cryptocurrency

Crypto’s nightmare scenario is here


07/28/2022 04:26 PM EDT

With help from Derek Robertson

While Coinbase’s problems with the SEC have flared up just in the past week, they represent the exact scenario that has been keeping crypto executives up at night for far longer.

In fact, Coinbase spokeswoman Lisa Johnson told me the company had been working for several months on the lengthy petition it filed with the agency last Thursday to formulate new rules pertaining to digital assets — an effort, in part, to head off charges of listing unregistered securities.

It was an unfortunate coincidence, then, that the SEC unveiled a complaint the same day implicitly accusing the company of doing just.

Coinbase future profits in cryptography

Sword of Damocles over this trillion dollar industry,” said Jay Verret, professor of law at George Mason University and a critic of the SEC’s approach to crypto, who said the issue has hung over the industry for the past five years.

But the industry was not looking for the sort of guidance that came in last week’s insider trading complaint against a former Coinbase employee, which declared that several crypto tokens offered by the exchange qualify as securities — or the sort that could come from the logical consequence of that finding: The investigation of Coinbase for possible listing of unregistered securities, whose existence Bloomberg reported on Monday.

Even before this week’s news, industry representatives had been complaining of “regulation by enforcement,” in which the agency makes clear its interpretation rules by punishing crypto firms that run afoul of them.

I look at the lessons of that, and see there’s finally a way to monetize open source software through the combination of the community, payment rails, and whatever you want to call it, Web3 or crypto incentivization — there’s got to be a way to use it for more than just Bitcoin, and build a new way for people to to work and collaborate. — Derek Robertson

afternoon snack

A huge change is coming to one of the most vibrant and long-running VR spaces.

VRChat — a metaverse-like space known for its copyright infringement-skirting avatars, bizarre role-playing, and problematic memes — announced this week that its next update would crack down on the user-driven modifications to the game’s code that made such things possible.

Derek Robertson

  • A handful of anti-tech Republican Senate candidates happen to have deep ties to the industry.
  • El Salvador is standing behind its Bitcoin bet despite the downturn.
  • Martin Shkreli is back, pitching his own vaguely-defined Web3 company.
  • Alphabet’s DeepMind is releasing an AI-driven database of nearly every protein that exists.
  • The Senate is passing its chip manufacturing bill just in time… for demand to dip.

Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Konstantin Kakaes ([email protected]); and Heidi Vogt ([email protected]).

Follow us on [email protected]

Ben Schreckinger covers tech, finance and politics for POLITICO; he is an investor in cryptocurrency.

If you’ve had this newsletter forwarded to you, you cansign up here. And readour mission statement here.

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Coinbase CEO, Brian Armstrong, announced that the company’s board had approved the crypto spending spree in an August 20 tweet, adding that Coinbase also plans to invest 10% of all profits generated into digital assets moving forward.

Armstrong also indicated the company hopes to increase the percentage of profit it allocates to cryptocurrency purchases over time.

A blog post published by Coinbase on the same day announces that the move will establish the exchange as the first publicly-traded company to hold Ether, DeFi tokens and Proof-of-Stake assets on its balance sheet.

The announcement emphasizes Coinbase’s commitment to making long-term investments in the crypto sector, stating:

“Our investments will be continually deployed over a multi-year window using a dollar cost averaging strategy.

The firm will also allocate 10% of its quarterly net income into various digital assets.

The major crypto exchange also noted that Coinbase would become the first publicly-traded firm to hold assets like Ethereum, Proof of Stake cryptocurrencies, DeFi tokens and other digital assets that are supported on its platform in addition to Bitcoin.

To avoid any conflict of interest with its customers, the trades required for cryptocurrency investment at the firm would be conducted through its over-the-counter desk or at a third party.

Coinbase further added that it might increase its allocation over time. The firm expects that more companies in the future will hold cryptocurrencies on their balance sheet as the industry matures.

In a talk at the Brookings Institution on Monday, Commodity Futures Trading Commission Chairman Rostin Behnam spoke of a “regulatory vacuum” that has prompted the commission to start “thinking creatively” about how to apply its authority.

In short, entrepreneurs moved quickly into a legal gray area based on their interpretation of the law, agencies are now moving to enforce their own interpretations, and Congress might, at some point, pass legislation that codifies new rules.

For its part, the SEC has maintained that many digital assets count as securities, and its chairman, Gary Gensler, has said that most crypto exchanges are offering at least some securities, whether or not the companies acknowledge doing so.

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