- Coinbase said that it has acquired an additional $350 million in cryptocurrencies.
- The exchange would be investing 10 percent of all revenues going forward in crypto.
In August, Coinbase acquired $500 million worth of crypto assets, and it has since bought much more. There are many reasons to believe that Coinbase (COIN) had a successful fourth quarter and fiscal year, but investors and even the Company’s C-suite are looking for explanations. Year-to-date, Coinbase’s depreciation of about 30% has even outperformed the crypto markets’ decrease of around 20% during the same period.
Diversification of Business
Even though Coinbase’s business is related to the movement of bitcoin prices, the company’s top executives argue that the company’s business is much more than simply the daily fluctuation of bitcoin prices.
Coinbase CFO Alesia Haas said:
“We’ve also observed that our stock has been highly correlated with crypto prices, which are down roughly 20% year-to-date. We honestly don’t truly understand this, as this correlation does not take into account the growth in our market share… the diversification of our business beyond investing, and let alone the future potential of our business as we expand into new assets and new product streams.”
Even while Coinbase claims to be more than simply a cryptocurrency exchange, it continues to place significant bets on the digital currency market. During this week’s earnings call, Coinbase said that it has acquired an additional $350 million in cryptocurrencies in “the last few weeks.” It follows the company’s purchase of more than $500 million worth of crypto assets in August, making it the most significant US crypto-assets exchange. As “the cryptoeconomy matures,” Coinbase said at the time that it would be investing 10 percent of all revenues going forward in crypto, with the goal of increasing that amount over time.
