Coinbase to acquire $500m cryptocurrency
Bitcoin exchange Coinbase will acquire more than $500 million worth of digital assets and subsequently invest 10% of all profits in them. This was announced by its CEO Brian 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
Hopefully over time we can operate more of our business in crypto - today it is still a mix.
The board has approved the decision, he said. The stake will increase in the future as the crypto economy "matures", Armstrong promised.
"Hopefully, over time, we will be able to run most of our operations in cryptocurrency. Right now it's still a mix [with fiat]," he added.
In reporting on Form 10-Q for the second quarter to the SEC, the bitcoin exchange said it held $222.7m in cryptocurrencies as at 30 June 2021, not including $145m in USDC (up from $62.3m at the start of the year). Coinbase invested $105.4m in bitcoin, $29.3m in Ethereum and $88m in other assets.
The exchange estimated the fair value of digital currencies net of USDC at $480.2 million.
As a reminder, Coinbase's total revenue for the second quarter was $2.2 billion, including proceeds from transaction fees of $1.9 billion. Net income reached $1.6 billion.