Coinbase said it would buy $500 million in cryptocurrency and invest 10% of all future profits in digital assets, according to a Thursday blog post.
The cryptocurrency exchange platform said it will soon be the first publicly traded company to hold Ethereum, proof of stake assets, DeFi tokens, and other cryptoassets, in addition to Bitcoin, on its balance sheet.
Brian Armstrong, Coinbase’s cofounder and CEO, said in a tweet Thursday that getting board approval to buy $500 million in crypto is just the beginning for the company.
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
“I expect this percentage to keep growing over time as the cryptoeconomy matures,” Armstrong said in the tweet.
Investments in cryptocurrency will be guided by the company’s “aggregate custodial crypto balances,” meaning customers will drive the investment strategy, the blog post explained.
The company expects to hold these digital assets for the long term, it said, and will divest only in certain cases, such as when a digital asset delists from the Coinbase platform.
With its new investment, Coinbase joins other large companies that have put money into crypto. Companies such as Tesla and the digital payments company Square, along with others, have recently invested millions in Bitcoin.
Despite its commitment to buying crypto, Coinbase is not limiting its investments to digital assets. The company also recently amassed $4 billion in cash to prepare for increased regulations expected to be put in place by regulators, including the Securities and Exchange Commission’s Gary Gensler.
Coinbase went public in April by opting for a direct listing instead of a traditional IPO, as other companies including Roblox and Squarespace did in 2021. Although some expected Coinbase to break the record for most valuable listing of any U.S. company, the company fell short when the dust settled.
Still, Coinbase debuted shares in what was the seventh-biggest listing in U.S. history. In its first quarter as a public company, it reported revenue of more than $1.8 billion, 58% more than it collected in all of 2020. The company brought in $2.23 billion in total revenue during the second quarter ended June 30, a huge leap from the $186 million earned in the same period last year.
Shares of Coinbase were trading up 4% at about $258 per share on Friday morning.
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