Coinbase invest all future profits crypto

Creating a buzz across financial markets globally as well as in fintech, Coinbase stirred the sentiments of investors and commoners alike by declaring that its balancesheet will be decked by the term “Crypto” as the company tends to invest in it, to get hold of $500 million, while putting aside 10% of its quarterly profits in its portfolio that centre around crypto.

Coinbase is first such public company to consider such initiative about specific crypto assets, finance chief Alyssa Haas notifies in her blog, ”Ethereum, Proof of Stake assets, DeFi tokens and many other crypto assets are supported for trading on our platform”.

CEO Brian Armstrong took to twitter to notify the world about his plans, expressing hopes for the ever expansive market.

Coinbase Puts $500 Million In Crypto

Coinbase CEO Brian Armstrong recently took to Twitter to announce that they had received approval from the board to purchase $500 million worth of crypto to put on the company’s balance sheet.

We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings. And we’ll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the cryptoeconomy matures.

— Brian Armstrong (@brian_armstrong) August 19, 2021

Related Reading | Number Of Short-Term Bitcoin Holders Hits All-Time Low, How This Affects The Price

Following the purchase, the company had to file a disclosure with the SEC outlining the crypto-assets that they had purchased.

Coinbase revealed today that they will execute a new $500 million purchase in cryptocurrency, adding that10% of all future profits will again be invested in cryptocurrencies.

Announcing on social Twitter was Coinbase’s CEOBrian Armstrong:

We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings. And we’ll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the cryptoeconomy matures.

— Brian Armstrong (@brian_armstrong) August 19, 2021

Not only that, according toreportson Coinbase’s official blog, the intention of this substantial investment by the leading U.S.

Coinbase invest all future profits crypto-pro

Coinbase to “further facilitate and influence both retail and institutional adoption” by merging cryptocurrencies into its own operational stream for purpose such as making payment to vendors and for paying salaries to employees.

Similar report featured in Wall Street Journal too this past week, where it was claimed that Coinbase has accumulated $4 billion in cash to brave regulatory headwinds. Albeit, Mr. Lau is content about more money in hand with company even after such a deal.

His words, ”Share repurchases and dividends appear to be off the table at least near term, but we believe management will use excess capital to reinvest in the business and make acquisitions, especially in international presence and subscription-based business”.

Interestingly enough, Elon Musk too, in recent past, has tried to tide over the bitcoin in his own unique ways.

Coinbase invest all future profits cryptoapi

Going forward, we will also allocate 10% of quarterly net income into a diverse portfolio of crypto assets. This means we will become the first publicly-traded company to hold Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform, in addition to Bitcoin, on our balance sheet.”

The idea is really to increase Coinbase’s cryptocurrency allocations over time.

A true long-term investment strategythe crypto-exchange described as follows:

“Our investments will be continually deployed over a multi-year window using a dollar-cost averaging strategy. We are long-term investors and will only divest under select circumstances, such as an asset delisting from our platform.”

The position of the leading U.S.

Coinbase invest all future profits cryptoax

The report showed that the company had spent the majority of the allocated funds on Bitcoin. With significant investments made into the second leading cryptocurrency in the market, Ethereum. The disclosure outlines that $238 million was spent on cryptocurrencies, with $230 million invested in Bitcoin, while the remaining $53 million was invested in Ethereum.

The figures in the disclosure also included the allocation of 10% of the company’s profits into cryptocurrencies, bringing the complete total in the disclosure to $500 million.
Going forward, the company plans to strengthen its positions in both Bitcoin and Ethereum with future profits. And is interested in opening positions in other promising cryptocurrencies as well.

Coinbase also explained that it wants tosupport COIN stock stakeholders.

Earlier this month, a negative outlook for COIN was published precisely because it related to the bear market experienced by cryptocurrencies. At that time,the estimate was to see the stock drop to $210.

And instead,the letter sent to stakeholdersby Coinbase the following week, with data for the second quarter, does not seem to reflect that forecast.

Coinbase’s Q2 generated $2 billion in revenuewith a 26% increase over Q1, just for retail transaction revenue.

Institutional transaction revenue also saw a 20% increase over the previous quarter, while revenue and subscriptions grew 82%.

At the time of writing,COIN is worth $248, far from the estimated forecast of $210 and -24% from its initial launch value.

Coinbase has announced that it plans to invest 10% of all profits in crypto. The exchange is one of the leading crypto exchanges in the world and with their profit margins, 10% will be a big investment going into crypto. All crypto purchases with crypto will be kept on the balance sheet going forward.

And the CEO expects this percentage to go up with time.

Related Reading | Grayscale Tops Up Ethereum Investment To $10 Billion

The exchange has recorded massive profits for the last year alone. Coinbase had announced a total profit of $.17 billion back in 2020. If this directive was in place then, Coinbase would have been putting $170 million in crypto holdings just for 2020 alone.
Profit margins for 2021 are projected to be even larger for the year 2021. Given that the company had earlier gone public in the year.

However, back out that gain and you still have a company that has clocked in with a net margin north of 40% in back-to-back quarters.

As crazy as it may seem that the niche-propelled Coinbase commands a $52 billion market cap, it’s actually trading at a trailing earnings multiple in the teens right now. Coinbase using 10% of its net income to buy crypto is a big deal. If Armstrong is right about that percentage growing over time — as Coinbase itself ideally grows — it’s going to be a lot of different types of cryptocurrencies bought and owned by Coinbase.

Investing in Coinbase was always about buying the entire crypto basket.

We’ve seen a couple of CEOs make headlines after making big bets on Bitcoin(BTC0.96%) this year. It isn’t always pretty. Michael Saylor at MicroStrategy(MSTR6.44%) has been vocal about parking his company’s cash in crypto, but he’s an acquired taste with his evangelical Bitcoin tweets. Tesla‘s (TSLA3.13%) Elon Musk was a more prolific Bitcoin backer, but the tide turned when he grew critical of the most valuable crypto’s energy efficiency and turned his attention to a meme coin.

It’s against this backdrop that Coinbase Global(COIN10.72%) founder and CEO Brian Armstrong is putting his company’s money where the leading cryptocurrency trading exchange’s mouth is.

Besides, company also hopes to variegate its crypto range of services and operations where trading remains at the centre.

As was expected, there was a splash in Bitcoin prices following such news, crossing above $47000 on Friday, as on August 20th, while it remained below $45000 mark for two days earlier.

This is worth mentioning that there are some companies whose holdings are ingrained with bitcoins, such as Tesla and Microstrategy while the aim has been to garner resilience towards inflation and also as a reaction to US dollar devaluation. Consequently, Citi considered reviewing Microstrategy’s ratings as it invests in Bitcoin.

Last week, Palantir disclosed its quarterly results highlighting its mammoth investment in gold worth $50 million with the intention to hedge against black swan events.

Founded by former Uber data scientist Moyi Dang and Uber, Robinhood and Microsoft veteran Bhavya Agarwal, Coinfeeds grew out a crypto news summary bot and API.

The firm, which says it want to become the Bloomberg for crypto, applies natural language processing to the social channels most frequented by web3 communities, Twitter, Telegram, and Discord to generate insights about community activity and sentiment.

After joining the Y Combinator accelerator programme, Coinfeeds has launched an app which includes free and premium options alongside API support for institutional and professional users.

All users have access to Twitter mentions and followers, Discord, and Telegram message activity alongside price and market cap change. However, sentiment-based insights are a premium feature.

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