Coinbase To Invest Billions In Various Cryptocurrencies
Top crypto exchange firm, Coinbase, has revealed that it has set aside about $520m to invest in various digital assets.
Coinbase Spreads Its Crypto Investing Options
Per the press release, Coinbase will spread the crypto investment across decentralized finance (DeFi) tokens, the top two cryptocurrencies, with various other proven digital assets. The exchange further revealed that it would start allotting 11% of its net earnings in these investments. Given that Coinbase’s net earnings for Q2 2021 was $1.63B, the company can have a cryptocurrency asset worth several billions of dollars in the next couple of years.
Before making this new announcement, the exchange had previously revealed that its crypto-asset was worth $317m as of December last year, according to its S-1 filing. A breakdown of that filing indicates that the majority of that amount was held in Bitcoin, while the remainder was spread across Ethereum and other crypto assets.
Coinbase might make more Ethereum investments than Bitcoin since data from exchanges now show that Ethereum’s trading volume on all exchanges is higher than that of Bitcoin. However, if the company chooses to increase its Bitcoin investment, it might be close to the Bitcoin investments of notable Bitcoin investors such as tesla and Micheal Saylor’s MicroStrategy. Commenting on the development, the Coinbase CEO revealed that he hopes that his company can make more crypto-related investments than non-crypto-related investments in the nearest future.
Coinbase CEO Tweet. Source: Twitter
Coinbase Business Expansion
Ever since it was listed on as a public company this year, the exchange has been on an aggressive global expansion. A wall street journal investigation revealed that Coinbase has a stash of about $4.5B it has earmarked to expand its presence worldwide and mitigate risks in its operations.
The exchange also revealed that it would create a separate OTC platform to perform the company’s crypto transactions. Thus, it can avoid being partisan with its clients’ needs. In another development, Coinbase also revealed that it would start providing digital asset retail services in Japan as part of its agreement deal with a top banking firm in Japan – the MUFG.
Hence, it can tap into the more than 41 million MUFG user base. If it continues its business expansion at this rate, it will be a matter of time before it usurps Binance position as the leading exchange in the world. Part of the announcement also states that the exchange’s business is in full compliance with the crypto policies in japan and would soon increase its digital asset service offerings.
Japan is also becoming stricter with its crypto policies. The country’s financial regulators recently sent a warning notice to Binance exchange over its running of an unapproved business in the country. Thus far, no country (including the US) is yet to warn or accuse Coinbase of running an unapproved business operation.
The company seemed to have sorted out all regulatory procedures to avoid financial regulator issues like its competition, Binance. Coinbase revealed the exciting news of its expansion into Japan via Twitter on Thursday.
Coinbase Japan Expansion Announcement. Source: Twitter
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