Coinbase Is Betting Against Michael Saylor’s Bitcoin Playbook; Here’s Why

Michael Saylor’s MicroStrategy has been a trailblazer in institutional Bitcoin adoption, with its aggressive accumulation strategy serving as a model for many other companies. In a surprising revelation, Coinbase CEO Brian Armstrong disclosed that the company had initially considered emulating MicroStrategy’s Bitcoin investment strategy, only to reject it in favor of a more cautious approach.

One of the prime reasons for Coinbase’s rejection of MicroStrategy’s investment approach was its perceived riskiness. “We made a conscious choice about risk,” stated Armstrong.

Coinbase Rejects MicroStrategy’s Bitcoin Buying Scheme

Coinbase, a top crypto exchange, initially thought of embracing the investment strategies of Michael Saylor’s MicroStrategy, one of the largest holders of Bitcoin. “There were definitely moments over the last 12 years where we thought, man, should we put 80% of our balance sheet into crypto — into Bitcoin specifically,” stated Brian Armstrong.

However, the exchange chose not to follow the scheme, later acknowledging its risky factor. Armstrong disclosed that the company had plans to allocate up to 80% of its balance sheet to Bitcoin but chose not to, fearing it could have jeopardized the firm’s financial stability as a startup. A recent Bloomberg report revealed Coinbase’s bold decision, while the rest of the world praises MicroStrategy.

Reportedly, Coinbase holds a significant amount of cryptocurrency, mostly Bitcoin. The exchange bought $153 million worth of crypto in the first quarter and currently holds $1.3 billion worth of crypto. CFO Alesia Haas posited that the company aims to grow its crypto holdings while avoiding competition with its customers. He stated, “Rest assured, we are not stopping there.”

Bitcoin-Centric Companies Rise

In contrast to Coinbase’s viewpoint, several companies are embracing MicroStrategy’s Bitcoin accumulation strategy. One such prime example is Japan’s Metaplanet, often known as Asia’s MicroStrategy. Recently, Blockstream CEO Adam Back revealed that Metaplanet has flipped MicroStrategy by generating more returns from BTC.

In addition, several Bitcoin miners and small-cap firms adopt MicroStrategy’s Bitcoin investment approach, which includes funding purchases through stock and debt sales. This trend has significantly contributed to the rising adoption of Bitcoin, which, in turn, boosts the BTC price.