Coinbase, a leading player in the cryptocurrency exchange realm, recently revealed it had flirted with adopting a Bitcoin-centric investment strategy akin to that of MicroStrategy’s Michael Saylor. However, the firm ultimately balked at the potential risks to its core business. This revelation comes from a Bloomberg report, which detailed a candid discussion with Coinbase’s CEO, Brian Armstrong, on May 9. Armstrong admitted the allure of channeling 80% of the company’s balance sheet into Bitcoin, but noted such a move could have jeopardized its liquidity and, by extension, the very essence of its crypto exchange operations.
The Bitcoin Temptation
During the video call with Bloomberg, Armstrong was forthright about the allure and pitfalls of a Bitcoin-heavy strategy. “There were definitely moments over the last 12 years where we thought, man, should we put 80% of our balance sheet into crypto — into Bitcoin specifically,” Armstrong mused. Yet, the specter of financial instability loomed large. “We made a conscious choice about risk,” he emphasized, underscoring a calculated approach to risk management that has long defined Coinbase’s strategy.
Joining Armstrong on the call was Alesia Haas, Coinbase’s Chief Financial Officer, who echoed the sentiment. Haas highlighted the company’s desire to avoid a scenario where it might be perceived as competing with its customers over cryptocurrency performance. “Rest assured, we are not stopping there,” Haas remarked, pointing to Coinbase’s recent acquisition of $153 million in crypto assets, primarily Bitcoin, as part of its first-quarter financial results disclosed on May 8.
Navigating the Crypto Terrain
Despite shying away from a Saylor-like approach, Coinbase remains a formidable force in the Bitcoin holdings arena. According to BitcoinTreasuries.net, the exchange boasts 9,480 Bitcoin, valued at approximately $988 million at present market rates. This substantial holding places Coinbase as the ninth-largest corporate Bitcoin holder, trailing notable entities such as MicroStrategy, Bitcoin miner MARA Holdings, and Tesla. As explored in our recent coverage of Strategy Raising Another $21B to Buy Bitcoin, the trend of significant Bitcoin acquisitions continues to shape corporate strategies.
The broader market landscape reveals a growing trend of companies emulating Saylor’s strategy, financing Bitcoin purchases through stock and debt sales in anticipation of appreciating Bitcoin prices and corresponding share value boosts. Over 100 public companies globally have declared Bitcoin holdings, alongside 40 exchange-traded fund issuers, 26 private firms, and a dozen nation-states. This proliferation underscores the cryptocurrency’s burgeoning role as a corporate asset.
A Strategic Acquisition
In a parallel development that underscores Coinbase’s strategic ambitions, the firm announced its acquisition of crypto derivatives platform Deribit for $2.9 billion on May 8. This deal, heralded as the largest corporate acquisition in the industry to date, significantly amplifies Coinbase’s presence in the crypto derivatives market—a domain previously served by its Bermuda-based platform.
Deribit’s impressive track record, with over $1 trillion in trading volume in 2024 and $30 billion in current open interest, positions Coinbase as a formidable force in the derivatives market. The acquisition is poised to redefine Coinbase’s market standing, with the firm touting itself as the “global leader” in crypto derivatives trading. For a deeper understanding of the strategic implications of such expansions, see Strategy’s $84B Bitcoin Expansion Plan Backed by Wall Street Analysts.
Looking Ahead
Coinbase’s cautious yet strategic maneuvers reflect a nuanced understanding of the volatile cryptocurrency landscape. By eschewing an all-in Bitcoin strategy, the company maintains its stability while still capitalizing on the digital asset’s potential. The Deribit acquisition is a testament to Coinbase’s forward-looking approach, potentially reshaping the competitive dynamics of crypto trading.
As the cryptocurrency ecosystem continues to evolve, Coinbase’s decisions will be closely watched by industry observers and participants alike. The question remains: Will the firm’s calculated risk management pay off in an ever-volatile market, or are bolder moves required to stay ahead in this rapidly changing arena? Only time will tell.
Source
This article is based on: Coinbase considered Saylor-like Bitcoin strategy before opting out: Bloomberg
Further Reading
Deepen your understanding with these related articles:
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- Metaplanet Registers U.S. Treasury Arm to Grow Its Bitcoin Reserve Strategy
- Metaplanet Issues $25M Bonds to Buy More Bitcoin
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
