Coinbase considered adopting a Bitcoin strategy like Michael Saylor’s but ultimately opted out fearing risks to its exchange. CEO Brian Armstrong emphasised their cautious approach to risk, which resulted in a decision not to heavily invest in Bitcoin. The company instead reported a purchase of $153 million worth of crypto assets and is acquiring Deribit for $2.9 billion to enhance its derivatives market presence.
According to Bloomberg, Coinbase briefly entertained the idea of adopting a Bitcoin investment strategy similar to that of Michael Saylor, the CEO of MicroStrategy. CEO Brian Armstrong revealed in a May 9 video call to Bloomberg that, over the past 12 years, there were moments they considered allocating 80% of their balance sheet into Bitcoin. However, they ultimately decided against it, fearing such a move could jeopardise the firm’s ability to function as a cryptocurrency exchange.
Armstrong explained that the risks associated with heavily investing in Bitcoin could have adversely affected Coinbase’s cash reserves, possibly threatening the survival of the crypto exchange itself. “We made a conscious choice about risk,” he emphasised during the discussion, underscoring their cautious approach to investment.
Alesia Haas, the CFO of Coinbase, joined Armstrong on the call and mentioned that they preferred not to position themselves as competitors against their customers by choosing which cryptocurrencies might perform better. However, she reassured listeners that this does not mean they were pulling back. In fact, Coinbase had just purchased an additional $153 million worth of crypto assets, mostly in Bitcoin, as highlighted in their Q1 results released on May 8.
As it stands, Coinbase holds approximately 9,480 Bitcoins, which translates to about $988 million at current market rates. This substantial amount constitutes a large portion of their $1.3 billion crypto asset portfolio, making Coinbase the ninth-largest corporate Bitcoin holder globally, following other major players like MicroStrategy, Marathon Digital Holdings, and Tesla.
Meanwhile, the trend of adopting Saylor’s strategy is catching on, with various companies making similar moves by using funds from stock or debt sales in hopes that Bitcoin will appreciate in value. Reportedly, more than 100 public companies now hold Bitcoin, in addition to 40 issuers of exchange-traded funds and numerous private firms and even countries.
On a different note, on May 8, Coinbase announced a significant acquisition in the industry. The firm has agreed to buy the crypto derivatives platform Deribit for an impressive $2.9 billion. This acquisition is notably the largest corporate purchase in the crypto sector to date and is poised to greatly expand Coinbase’s influence in the crypto derivatives market, which had previously centred on their Bermuda-based platform.
Coinbase pointed out that Deribit had an impressive trading volume exceeding $1 trillion in 2024, with around $30 billion in current open interest. This acquisition firmly places Coinbase at the forefront of the global crypto derivatives trading landscape, reinforcing its ambition to lead the sector amid an increasingly competitive environment.
