Leading U.S. cryptocurrency exchange Coinbase has updated its investment policy in order to increase investments into cryptoassets.
According to a recent blog post, Coinbase has decided to make a change in its investment policy towards greater crytpoasset involvement, The company reports the decision was made after noticing that the “majority” of Coinbase corporate financial transactions, such as paying vendors, employees and investing corporate cash, are heavily weighted in fiat.
The blog post also said that Coinbase’s new strategy is committed to investing $500 million of its existing cash and cash equivalents, as well as 10% of its future quarterly net income, in cryptoassets:
Going forward, we will also allocate 10% of quarterly net income into this same portfolio.
Coinbase claims the shift in policy will make them the first publicly traded company to hold Bitcoin, Ethereum, Proof of Stake Assets, DeFi tokens, and many of the cryptoassets supported by their exchange on their balance sheet. The company will allocate their investments based upon “aggregate custodial crypto balances”, meaning that customer decision-making will hold some role in the company’s investment strategy.
Coinbase intends to deploy their investment over a multi-year span using dollar cost averaging. The release describes the company’s mindset as “long term investors” that will only divest under select circumstances, such as an asset being delisted. Coinbase will also execute trades through their over-the-counter desk in order to avoid a conflict of interest with customers.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.