On August 20th, Coinbase co-founder and CEO Brian Armstrong tweeted that we recently obtained the approval of the board of directors to purchase more than $500 million in cryptocurrency on our balance sheet to increase our existing Holdings. And we will invest 10% of all profits in cryptocurrencies. As the crypto economy matures, I expect this ratio will continue to grow over time.
In addition, Brian Armstrong also pointed out in his reply that more business will be carried out in the encryption field over time.
In fact, Coinbase’s actions in the crypto field are more than just increasing purchases. Earlier, Brian Armstrong also revealed his wish that Coinbase would become an “asset Amazon.”
According to data from market research firm CB Insights, Coinbase Ventures, the venture capital arm of Coinbase, completed 37 transactions in the first half of the year, nearly doubling the number of transactions throughout the year last year, ranking third in corporate venture capital funds, second only to Google (64 transactions) and Salesforce (59 transactions). Coinbase Ventures has invested in startups such as Vega Protocol, a decentralized derivatives trading network, Bitcoin self-custodial company Casa, and trading company Fractal. Corporate venture capital refers to the direct investment of corporate funds in external start-up companies. Because many companies have strong capital, they are more likely to conclude large-scale transactions.
In addition. Overseas expansion is also continuing. On August 19, Coinbase announced the establishment of a partnership with Mitsubishi UFJ Financial Group (MUFG) to launch the Japanese Coinbase platform. The goal of the platform is to comply with local regulations and become one of the easy-to-use encrypted trading platforms. Mitsubishi UFJ Financial Group is one of Japan’s largest banks, serving 40 million Japanese customers. Coinbase will first launch products suitable for retail investors, including the 5 assets with the highest trading volume, and will add more assets and products in the coming months. Coinbase also plans to launch more localized services globally in the future, such as advanced trading and institutional Coinbase.
However, there is no lack of hidden worries behind Coinbase’s continued investment. Earlier, Mizuho stated in a report to customers that “winter” may have a major impact on Coinbase’s business. “Winter” refers to a period of time when the prices of Bitcoin and other digital currencies have fallen sharply and stagnated at low levels.
In addition, on August 11 news, Coinbase announced its financial report on Tuesday and its revenue exceeded analysts’ expectations. However, an American investment research company still believes that the market value of the largest cryptocurrency exchange in the United States is clearly overestimated. At the same time, for Coinbase, whose trading revenue dominates, the decline in trading users is also a major concern. According to the financial report for the second quarter of 2021 released by Coinbase, the transaction revenue in the second quarter reached US$1.93 billion, but Coinbase expects that the transaction volume in the third quarter will be lower than that in the second quarter, and monthly transaction users (MTU) will also appear Down. The MTU in July was 6.3 million and the transaction volume was 57 billion U.S. dollars.
Obviously, Coinbase is also well aware of its limitations. According to the latest data, Coinbase has accumulated a cash reserve of 4.36 billion U.S. dollars as of the end of June, which is much higher than the 1.1 billion U.S. dollars at the end of last year. The risk situation continues to grow. Coinbase Chief Financial Officer Alesia Haas said that we hope to maintain these cash reserves so that when the crypto bear market comes, we can continue to invest and continue to develop our products and services.
Maybe, like the crypto market, Coinbase is much more than that, but it also has a long way to go.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/coinbase-ceo-brian-armstrong-buy-more-than-500-million-us-dollars-in-cryptocurrency/
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