$COIN (-5,96%) . $BTC (+0,16%)
Coinbase has so far only pursued a cautious Bitcoin strategy, which has led to even a small Japanese hotel company called Metaplanet now holding a larger BTC portfolio. However, this could now change: According to Coinbase CEO Brian Armstrong, the public company is buying Bitcoin every week.
Coinbase, the major US crypto exchange, buys Bitcoin every week. This was announced by Brian Armstrong, CEO of the almost 100 billion US dollar stock corporation, on 𝕏.
"We buy more Bitcoin every week. Long Bitcoin
(Brian Armstrong)
He was responding to a post by David Bailey, CEO of Bitcoin Magazine and founder of the "Bitcoin Treasury Company" Nakamoto.
Bailey congratulated Coinbase on reaching a new all-time high, but emphasized that the company still lacked a proper Bitcoin balance sheet.
The Bitcoin strategy of Coinbase
Coinbase has been holding Bitcoin for investment purposes for some time now. At the end of the first quarter, it held 9,267 BTC. However, the company has not made any substantial purchases in recent years - more than 2.5 years ago, Coinbase was already sitting on 9,480 BTC.
Coinbase had actually considered pursuing a more ambitious Bitcoin strategy á la Strategy (formerly MicroStrategy) in the past, but ultimately decided against it due to the risks involved.
"There have definitely been moments in the last 12 years where we've thought, "Man, should we put 80% of our balance sheet into cryptocurrencies - specifically Bitcoin?"
(Brian Armstrong in a video call on 𝕏)
As Bitcoin is now subject to less risk due in part to the support of the US government, now may be the time for Coinbase to change its approach after all.
How significant the weekly Bitcoin purchases mentioned by Armstrong will be remains to be seen. We will have to wait for the report for the second quarter to find out.
Bitcoin strategy as a model for success
In terms of its investment strategy, Coinbase tends to follow the approach of Tesla, Block or Rumble, which have only invested a small proportion of their balance sheet in Bitcoin. In this respect, the crypto exchange differs from the so-called "Bitcoin Treasury Companies", which pull out all the stops to buy more Bitcoin.
The "first mover" Strategy bought Bitcoin for the first time in August 2020. Through intelligent capital raising, the business intelligence software company has so far managed to acquire 592,345 BTC worth more than USD 60 billion, while its share price has risen by more than 3,000%. Strategy now has a market capitalization of around USD 108 billion, making it larger than Coinbase.
Metaplanet, a Japanese hotel company, began copying Strategy just over a year ago. The company has since been able to build up a Bitcoin balance of 12,345 BTC, with a negligible debt of around 12 million US dollars. The Bitcoin on Metaplanet's balance sheet is currently worth about 90 times the company's market capitalization before Bitcoin Strategy.
The fact that a small company struggling to survive has managed to build up a larger Bitcoin stock than Coinbase in just over a year is remarkable - especially since the crypto exchange was founded in 2012, when one BTC cost just a few US dollars.
So far, however, Coinbase has been a success story even without an ambitious Bitcoin strategy. The company is one of the 110 largest US stock corporations and has been part of the S&P 500 US stock index since mid-May. In the first quarter, Coinbase generated a profit of USD 65.6 million.
Nevertheless, a more aggressive Bitcoin strategy would probably only have positioned the company even better. However, it is not too late to jump on this bandwagon, as Coinbase CEO Brian Armstrong, who sees Bitcoin as the world's potential next reserve asset, may have understood.
https://www.blocktrainer.de/blog/coinbase-kauft-jede-woche-bitcoin
