[2021-08-20]Coinbase is buying $500 million in crypto and investing future prof

[Woodie]

Coinbase is buying $500 million in crypto and investing future profits into a crypto portfolio

Coinbase will buy $500 million in crypto on its balance sheet and allocate 10% of its quarterly profits into a crypto assets portfolio, company executives announced late Thursday.

The company plans to invest in "Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform," becoming the first public company to do so, finance chief Alesia Haas said in a blog post.

CEO Brian Armstrong first revealed the brokerage's plans in an earlier tweet, saying he expects the allocation to grow as the market matures. He also indicated the company's ambitions to diversify its crypto services and operations, which mostly center around trading.

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," Armstrong said on Twitter. "Today it is still a mix."

The price of bitcoin climbed higher on the news, passing $47,000 on Friday after sitting below $45,000 the previous two days. Coinbase shares rose more than 3% higher in early trading Friday.

The few companies that have included bitcoin in their holdings, like Microstrategy and Tesla (with the help of Coinbase), have done so as a hedge against inflation and potential devaluation of the U.S. dollar. On Thursday, Citi placed Microstrategy's rating under review, suspending its price target and estimates due to its investment in bitcoin and correlation to the digital currency's price.

https://www.cnbc.com/2021/08/20/coinbase-is-buying-500-million-in-crypto-and-investing-future-profits-into-a-crypto-portfolio.html

[Karartma1]

So Coinbase laments that all corporate financial operations like paying suppliers, employees, or investing corporate money still remain heavily weighted in fiat.
For this reason, the decision to update this policy of investing heavily in crypto seems like it could become the perfect example to push the crypto economy into corporate practices as well.
In this regard, Coinbase stated the following:

We have committed to invest $500 million of our cash and cash equivalents. Going forward, we will also allocate 10% of quarterly net income into a diversified cryptocurrency portfolio. 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.

You need more than that to please your stakeholders.....

[SFR10]

Coinbase will buy $500 million in crypto on its balance sheet
~Snipped~

Our crypto asset investment allocation will be driven by our aggregate custodial crypto balances — meaning our customers will drive our investment strategy.

Does anybody know if there's a way to "clearly" view or monitor their current balance sheet?
^{- The best one that I could find for this year, was "this one", but even with that, I'm still not sure where such investments belong on the list [I'm looking for a way that clearly shows the amount for each of their crypto assets].}

[Vishnu.Reang]

So they are going to keep 10% of their annual profit in the form of cryptocurrency. As per the S-1 statement, their PAT is $1.14 billion. So that means an investment of $114 million per year, or around $9 million per month. Not a bad amount, I would say. And hopefully this amount will go up, as their profit increases. It will be interesting to know the breakup of their investment. Are they going to invest primarily in BTC or is their portfolio going to be altcoin heavy? This was one of the mistakes made by Overstock. They went primarily for altcoins in 2014 and it sunk them.

[Slow death]

Are they going to invest primarily in BTC or is their portfolio going to be altcoin heavy?

from what I've seen from the article they are interested in investing in ETH and in these DeFi projects, I wonder why they don't give priority to investing in bitcoin? are they also on the wave of 10X profits? it would be unbelievable that a big company with a lot of money is investing to make 10X profits

This was one of the mistakes made by Overstock. They went primarily for altcoins in 2014 and it sunk them.

I did not know that. but coinbase is a company of smarter people, they know what they're dealing with 

[NeuroticFish]

Are they going to invest primarily in BTC or is their portfolio going to be altcoin heavy?

from what I've seen from the article they are interested in investing in ETH and in these DeFi projects, I wonder why they don't give priority to investing in bitcoin? are they also on the wave of 10X profits? it would be unbelievable that a big company with a lot of money is investing to make 10X profits

While many are preaching a new altcoin season and from that point of view the move may make sense, I find it pretty much strange for such a company buy more altcoins than more Bitcoin. Whatever analyst say about altcoin season, the altcoins are overly risky to invest into and they could have stayed on the safe side, with more bitcoin.

And their statement was pretty much misleading/vague i.e. leaving people believe what the want, especially at first, when the initial statement came out, that they buy "crypto". I didn't like that.