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Coinbase to Invest 10% of Quarterly Net Income Into Crypto

2 mins
Updated by Kyle Baird
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In Brief

  • Coinbase will be increasing its investments into crypto assets.
  • The new investment policy will see Coinbase dedicate $500 million of cash and cash equivalents for investment.
  • Additionally, it will allocate 10% of its quarterly net income into a portfolio of crypto assets.
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Coinbase has announced a strong initiative to invest more of its earnings into cryptocurrency, wishing to lead by example in the adoption of crypto.

Coinbase announced on August 20 that it had updated its investment policy, increasing its investments in crypto assets. Saying that it believes in a crypto economy, “where buying, selling, spending and earning will be based on crypto assets,” the exchange hopes to eventually encourage greater crypto utility.

The San Francisco-based exchange wants to “lead by example,” and encourage adoption and utility by working into the business. The new investment policy will see Coinbase dedicate $500 million of cash and cash equivalents for investment. Furthermore, it will allocate 10% of its quarterly net income into a portfolio of crypto assets.

As Coinbase rightly notes, the portfolio of crypto assets would make it the first publicly traded company to hold ether, Proof of Stake, DeFi, and other crypto assets trading on the platform — in addition to bitcoin.

The investments themselves will be deployed over many years through dollar-cost averaging. The company concluded on a highly optimistic note about the future of crypto use, saying,

“We may increase our allocation over time as the cryptoeconomy matures. We believe that in the future, more and more companies will hold crypto assets on their balance sheet. We hope by incorporating more crypto assets into our own corporate financial practices, we can take another step towards building a more open cryptoeconomy.”

This development is yet another by Coinbase to strengthen the presence and use of crypto. It has taken several similar steps in the past and, for the most part, has been doing it with success.

Coinbase leading the charge

Coinbase has been moving full steam ahead with its plan to become a global presence and, generally, become the go-to platform for investors. It recently announced that it had launched in Japan, where there is a very active crypto market.

To that end, it has been playing friendly with regulators, who have been cracking down on crypto exchanges. It sold forensics software to the U.S. Customs and Immigration Office, in addition to striking a deal with the U.S. Secret Service.

The exchange’s public listing was the talk of the town for weeks when it happened; it has spurred other exchanges, like Kraken, to go public as well. Circle, the company behind USD Coin (USDC), also plans to go public, following in Coinbase’s footsteps.

The road to public listing hasn’t been all smooth for Coinbase, however. The exchange received a lot of flak last year for several incidents, including allegations of racism. Perhaps the most controversial of incidents was when the company said that it would maintain a politically neutral stance.

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Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...