Coinbase Passed on Saylor-Style Bitcoin Bet to Safeguard Cash

The largest US crypto exchange, Coinbase, nearly risked everything on Bitcoin (BTC), and I’m not exaggerating. 

Related: Crypto Soars as BTC Nears $100k while US Fed Keeps Interest Rates Steady

CEO Brian Armstrong revealed in a May 9 Bloomberg video call that the exchange seriously debated allocating over 80% of its balance sheet into BTC. Ultimately, he said, they made “a conscious choice about risk”, fearing that dumping so much cash into a single asset could have killed the crypto exchange.

Armstrong’s admission comes as Coinbase discloses another US$153M (AU$283M) in crypto purchases for Q1 202, largely concentrated in none other than Bitcoin. The company’s CFO, Alesia Haas, joined the call and explained the hesitation.

It turns out the firm didn’t want to “be seen as directly competing against its customers over which cryptocurrencies would outperform”. Instead, Coinbase quietly maintains roughly 9,480 BTC (about AU$1.5B at today’s prices), making it the ninth-largest corporate holder globally according to BitcoinTreasuries.net, outranked by Hut 8 and Tesla.

Still, Haas promised the exchange won’t slow its accumulation: “Rest assured, we are not stopping there.”

Strategy’s Playbook

The idea of adopting Michael Saylor’s playbook, basically funding massive Bitcoin buys through equity and debt, has enticed more than 100 public companies, a few dozen private firms, 40 ETF issuers, and even a baker’s dozen nation-states. 

Yet Coinbase shied away, citing the need to preserve operational flexibility and long-term sustainability over headline-grabbing treasury bets. 

And they made a point. While an attractive investment, putting the company’s funds into Bitcoin could have come with a big overhead and stress. It was just over a month ago that Strategy reported a considerable loss in Q1 as the Bitcoin price slid to under US$82k (AU$127k). 

Bitcoin is currently trading at US$104K (AU$161K) at press time.

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