What Happened?
Although there were considerations about whether to invest most of the balance sheet into Bitcoin like MicroStrategy, Coinbase ultimately decided to take a more cautious approach, weighing the potential risks to the company’s cash flow and avoiding direct competition with its customers. However, they still hold a significant amount of cryptocurrency as investment, primarily in Bitcoin. In recent years, many companies, including Bitcoin mining enterprises, small businesses, and newly established crypto companies, have been raising funds to purchase Bitcoin through issuing stocks or debts, hoping to boost their stock prices through the appreciation of Bitcoin, a trend that indicates the widespread acceptance of Bitcoin as corporate assets.
Why Didn’t Coinbase Follow MicroStrategy’s “All In” Bitcoin Strategy?
In today’s gradually flourishing cryptocurrency landscape, how companies manage their digital assets remains a focal point of market attention. The world’s leading cryptocurrency exchange, Coinbase, also faced a significant decision: whether to allocate a large portion of its balance sheet into Bitcoin, similar to MicroStrategy founder Michael Saylor. Ultimately, Coinbase chose a more conservative route after weighing the risks.
Brian Armstrong, co-founder and CEO of Coinbase, recently stated on social platform X: “Over the past 12 years, we have indeed had moments thinking, should we put 80% of our balance sheet into cryptocurrency — particularly Bitcoin?” However, he pointed out that Coinbase ultimately decided against taking that risk, as it could jeopardize the company’s cash position as a startup and could even “kill” the company. “We made a conscious choice regarding risk,” Armstrong emphasized.
Nevertheless, according to Coinbase’s latest shareholder letter, the company purchased $153 million worth of cryptocurrency for its portfolio in the first quarter, most of which was Bitcoin. As of now, Coinbase holds $1.3 billion worth of cryptocurrency investments, also primarily in Bitcoin. Coinbase CFO Alesia Haas stated that Coinbase does not want to be viewed as competing with its customers, who are also investing in cryptocurrencies. However, she added, “Rest assured, we will not stop here,” indicating that the company plans to continue increasing its cryptocurrency holdings.
According to data from BitcoinTreasuries.net, Coinbase holds 9,480 Bitcoins, valued at approximately $988 million, making it the ninth-largest corporate holder of Bitcoin, following MicroStrategy, Bitcoin mining company MARA Holdings, and Tesla.
The “Crazy Bitcoin Buying” Strategy Sparks Corporate Imitation
Since MicroStrategy began purchasing Bitcoin in 2020, its stock price has soared over 3,000%, and the company currently holds approximately $54 billion in cryptocurrency. Recently, a number of companies have followed Michael Saylor’s approach, raising funds through stock and debt issuance to purchase Bitcoin, betting on the rapid appreciation of the cryptocurrency to boost their stock prices.
In recent weeks, a subsidiary of the Wall Street stalwart Cantor Fitzgerald announced that it is working with stablecoin issuer Tether and SoftBank Group to launch a company called Twenty One Capital, which mimics the MicroStrategy business model. After revealing that its Bitcoin holdings had increased from 833 to 5,833, Beijing-based software company Next Technology Holding saw its stock price in the U.S. surge by over 600%, triggering multiple trading halts.
Currently, over 100 publicly traded companies globally have reported holding Bitcoin, along with 40 exchange-traded fund issuers, 26 private companies, and 12 countries.
193 publicly traded entities now hold BTC on their balance sheet
+200% increase Year to Date
This is just the beginning.
We. Are. Going. Higher.
Shifting focus from individual corporate strategic choices to a broader market perspective, it is clear that Bitcoin is accelerating its integration into the global financial system. This phenomenon not only confirms the foresight of MicroStrategy’s early bold bets but also highlights that Bitcoin, as an emerging reserve asset and store of value, is increasingly being recognized by traditional institutions and sovereign entities.
Although Coinbase, based on its business characteristics and risk considerations, has opted for a more prudent Bitcoin holding strategy, this does not affect the trend of Bitcoin’s widespread acceptance. On the contrary, an increasing number of participants, whether through direct holdings, the issuance of financial products, or inclusion in national reserves, are adding weight to Bitcoin’s legitimacy, liquidity, and stability.
This institutionalization and mainstreaming process signify that Bitcoin is no longer a marginalized experimental asset but is gradually becoming an indispensable part of global investment portfolios. Against this backdrop, the maturity of the cryptocurrency market will continue to enhance, and companies like Coinbase, with their in-depth focus and innovation in core businesses, will undoubtedly play a critical role in this transformation wave, collectively propelling the comprehensive arrival of the digital asset era.
References: cointelegraph, bloomberg