David Edwards
Coinbase, one of the largest cryptocurrency exchanges in the United States, reportedly considered adopting a bold Bitcoin investment strategy akin to that of MicroStrategy’s Michael Saylor on multiple occasions over the past 12 years. However, the company ultimately refrained from executing such a plan, citing the risks it posed to the stability of its core exchange operations.
Coinbase CEO Brian Armstrong disclosed in a May 9 video interview that the company’s leadership team has discussed internally whether to invest up to 80% of its balance sheet in Bitcoin. Over the past 12 years, Armstrong acknowledged, “there were definitely times when we thought, man, should we put 80% of our balance sheet into crypto — into Bitcoin specifically?” He underlined that although the concept was alluring, Coinbase’s financial reserves and operational stability would have been jeopardized. “We made a conscious choice about risk,” he added.
Alesia Haas, the chief financial officer, went into greater detail about the company’s perspective, pointing out that adopting a sizable Bitcoin position might have put Coinbase in direct conflict with its clients over whose digital assets would be most popular. As part of its first-quarter financial filing on May 8, Haas instead reiterated the company’s methodical approach, pointing to the recent $153 million purchase of cryptocurrency assets, primarily in Bitcoin.
Coinbase is the ninth-largest corporate Bitcoin holder in the world with 9,480 Bitcoin, worth around $988 million, while not adhering to the aggressive Bitcoin accumulation practice of companies like MicroStrategy. Its $1.3 billion in cryptocurrency holdings demonstrate a robust although varied dedication to digital assets.
The increasing number of businesses copying Saylor’s high-leverage Bitcoin strategy stands in contrast to this strategic conservatism. These businesses frequently use debt and equity offerings to fund Bitcoin acquisitions in the hopes that long-term price growth will increase shareholder value.
Coinbase’s decision comes at a time when the business is undergoing significant change. It revealed the $2.9 billion purchase of Deribit, a well-known cryptocurrency derivatives platform, on May 8. Coinbase’s foothold in the derivatives market, which was previously limited to its Bermuda-based activities, is greatly increased by this deal, which is the biggest in the industry to date. In 2024, Deribit handled more than $1 trillion in trading volume and had $30 billion in open interest.
