Coinbase Invests $500M in Cash and Cash Equivalents and to Allocate 10% of Quarterly Net Income in Crypto

Cryptocurrency exchange Coinbase said it has committed $500 million in cash and cash equivalents, and 10% of its quarterly net income will be invested in a portfolio of crypto assets.

The announcement was released on Friday, Coinbase said the firm will improve its investment policy and redouble its efforts to achieve the adoption and utility of cryptocurrencies.

Alesia Haas, the Chief Financial Officer of Coinbase, said through the statement:

"This means we will become the first publicly traded company to hold Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform, in addition to Bitcoin, on our balance sheet."

Coinbase stated that as a long-term investor, it would not easily withdraw funds unless there are special circumstances such as the delisting of cryptocurrency assets from the Coinbase trading platform.

All cryptocurrency investments will be executed through the Coinbase counter or away from the Coinbase exchange to avoid conflicts of interest with investors on the exchange.

According to a report by the wall street journal on August 18, Coinbase has established a cash reserve of 4 billion U.S. dollars to expand its scale to withstand potential business risks and prepare for higher compliance costs.

Ms. Haas said that:

"We want to ensure that we maintain those cash reserves so that we can continue to invest and continue to grow our products and services in the event that we go into a crypto winter."

On August 10, the company reported that its net income for the second quarter was $1.6 billion, up almost 4,900% from a year earlier, following a volatile period of crypto trading.

As reported by Blockchain.News on August 10, Coinbase’s second-quarter revenue hit $2.23 billion compared to $1.78 billion, which analysts had expected. Also, the company’s earnings stood at $3.45 per share, excluding stock-based compensation benefits compared to $2.33 per share, which analysts had expected.