Coinbase gets board OK to add $500 million in crypto to balance sheet, and aims to invest 10% of profit in digital assets
Coinbase CEO Brian Armstrong on Thursday said that the U.S.’s largest digital-asset exchange received board authorization to add $500 million in crypto to its balance sheet.
In a tweet, Armstrong, co-founder and head of the platform, said Coinbase would also be investing 10% of all profits in crypto.
In a late-Thursday blog from Coinbase, CFO Alesia Haas expanded on Armstrong’s tweets.
“We believe in the cryptoeconomy, a future where economic transactions—buying, selling, spending, earning—will be based on crypto assets,” she wrote.
“This means we will become the first publicly traded company to hold Ethereum, Proof of Stake assets, [decentralized finance] tokens, and many other crypto assets supported for trading on our platform, in addition to bitcoin, on our balance sheet,” Haas wrote.
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Some of the largest publicly traded companies now include digital assets on their balance sheet, a growing trend in 2021, include MicroStrategy MSTR,
Recently, Coinbase said that it had built a $4 billion cash stockpile, as it prepares for closer scrutiny from the likes of the Securities and Exchange Commission’s Gary Gensler and others. The platform could also face new tax-reporting requirements under the roughly $1 trillion infrastructure bill in Congress.
The exchange platform listed on the Nasdaq COMP,
Coinbase held a direct listing instead of a standard initial public offering, meaning that the company didn’t raise money through the process of going public and doesn’t have a traditional IPO price against which to measure the stock’s first-day rally.
Earlier this month, Coinbase posted net revenue of $2 billion in the second quarter, up from $178 million a year earlier and $1.6 billion in the first quarter. Coinbase had $1.9 billion in transaction revenue, surpassing consensus expectations for $1.8 billion.
About 50% of the company’s business is still based on bitcoin and Ether trading and those assets have been volatile falling substantially from peaks hit during the spring, though digital assets are attempting a rebound, with the total crypto market hitting $2 billion in value for the first time since May.
Ether prices have been on the rise as the crypto is in the process of a multistep upgrade to the Ethereum network, which includes a shift from a proof-of-work protocol to a proof-of-stake and increased storage capacity and processing power for smart contracts.
