Coinbase Pledges $500 Million to Crypto Investment, Allocates 10% Quarterly Income to Cryto

Public-listed cryptocurrency exchange Coinbase (NASDAQ: COIN) has made a major announcement regarding the company’s plans to invest in crypto. Coinbase CEO Brian Armstrong announced a few hours back that they have secured board approval to invest $500 million of its cash equivalent in cryptocurrency. 

But the buck doesn’t stop here! As a leading player in the crypto space, the crypto giant pledges to invest 10% of its quarterly profits in crypto. The Coinbase CEO also noted that this amount will be incremental as and how the crypto economy matures further.

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

Defining the goal of its latest investment policy, the official Coinbase blog notes:

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.

Coinbase Customers to Lead Its Investment Strategy

Coinbase noted that its customers will be driving its official investment strategy. Thus, Coinbase’s investment allocation towards crypto assets shall be driven by its aggregate crypto custodial balances.

The crypto giant further noted that its investment will spread over a multi-year window while implementing a dollar-cost averaging strategy. The company noted:

We are long term investors and will only divest under select circumstances, such as an asset delisting from our platform. All trades will be executed via our over the counter desk or away from our exchange to avoid any conflict of interest with our customers.

Coinbase’s recent move will encourage more players in the crypto space to hold digital assets on their balance sheets. Earlier in 2021, Coinbase made a blockbuster debut on Wall Street, however, the COIN share entered a steep correction. But over the last month, the COIN share has resumed a northward journey while beating Street expectations with its Q2 2021 results.