Coinbase considered following MicroStrategy's Bitcoin strategy but decided against it, citing risk concerns as the main reason.
Michael Siler's MicroStrategy has been a trailblazer in institutional Bitcoin adoption, with his aggressive accumulation strategy serving as a model for many other companies.
In a surprising revelation, Coinbase CEO Brian Armstrong revealed that the company initially considered emulating MicroStrategy's Bitcoin investment strategy, only to reject it in favor of a more cautious approach.
One of the main reasons Coinbase rejected MicroStrategy's investment methodology was its perceived risk. "We made a conscious choice about the risk," Armstrong said.
Coinbase Rejects MicroStrategy's Bitcoin Buying Scheme
Coinbase, a top crypto exchange, initially considered adopting the microstrategy investment strategies of Michael Siler, one of the largest holders of Bitcoin. "
There were definitely moments in the last 12 years when we thought, man, should we be putting 80% of our balance sheet into crypto ā specifically bitcoin," Brian Armstrong said.
However, the exchange later chose not to pursue the scheme, acknowledging its risk factor.
Armstrong revealed that the company had planned to allocate up to 80% of its balance sheet to bitcoin but feared that this could threaten the firm's financial stability as a startup.
A recent Bloomberg report revealed Coinbase's bold decision, while the rest of the world applauds the micro-strategy.
According to reports, Coinbase holds a significant amount of cryptocurrency, mostly Bitcoin.
The exchange bought $153 million worth of crypto in the first quarter and currently has $1.3 billion worth of crypto.
CFO Alesia Haas said the company's goal is to grow its crypto holdings while avoiding competition with its customers. "Be assured, we're not stopping there," he said.
Bitcoin centric companies are booming.
In contrast to Coinbase's approach, several companies are adopting MicroStrategy's Bitcoin accumulation strategy.
One such prime example is Japanās Metaplanet, often referred to as the MicroStrategy of Asia. Recently,
Blockstream CEO Adam Beck revealed that Metaplanet has overturned MicroStrategy by generating more profits than BTC.
In addition, many bitcoin miners and small-cap firms have adopted microstrategy's bitcoin investment approach, which involves funding purchases through the sale of stock and debt.
This trend has contributed to the growing adoption of Bitcoin, which in turn, increases the value of BTC.
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