America’s largest digital asset exchange, Coinbase, will expand its cryptocurrency holdings on the balance sheet with a $500 million allocation, said the company’s CEO, Brian Armstrong. Furthermore, he promised that the firm will invest 10% of its profit going forward.
Coinbase to Put More Crypto on Balance Sheet
Coinbase’s CEO, Brian Armstrong, said on Twitter that the company has received board approval to purchase more than $500 million worth of cryptocurrencies. Therefore, the exchange will expand its existing assets, but it did not reveal what digital assets Coinbase currently holds or plans to buy.
In addition, the largest trading platform in the USA will now invest 10% of all profits in cryptocurrencies. Armstrong predicts that this percentage will continue to grow as the crypto economy matures.
Based on at least recent history in US dollars, the 10% profit payout can be pretty important. The company reported record results in the second quarter of 2021, well ahead of the first quarter’s numbers with net income of $1.6 billion. This is an increase of 4,900% over the same period in 2020.
Even if Armstrong’s prediction of the industry’s continued growth doesn’t come true, investing 10% in cryptocurrencies means roughly $160 million per quarter.
The executive also outlined hopes that one day the exchange will be able to “operate more of our business in crypto,” as today it’s “still a mix.”
Crypto Exchange Goes to Japan
The day before Armstrong announced the news, the company outlined its expansion plans. The statement said the exchange has nearly 70 million active users, operates in more than 100 countries, and launched in Japan. To this end, Coinbase partnered with a well-known local bank, the Mitsubishi UFJ Financial Group (MUFG). Therefore, Japanese customers can access trading venues via the MUFG quick deposit platform.
The US exchange will initially release retail products, including the top five assets by trading volume, and will add more products in the near term. Future plans also include the introduction of localized versions of other services such as Advanced Trading and Institutional Coinbase.