We can make estimates on the size of the bitcoin allocation that will be made by Coinbase following announcement of its new reserve policy.
The below is from a recent edition of the Deep Dive, Bitcoin Magazine‘s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
“We have committed to invest $500 million of our cash and cash equivalents into a diverse portfolio of crypto assets. Going forward, we will also allocate 10% of quarterly net income into this same portfolio.” – The Coinbase Blog
In a tweet from Coinbase CEO Brian Armstrong on Thursday night, it was announced that Coinbase was going to be purchasing $500 million in a “diverse portfolio of crypto assets,” and an interesting note is that the portfolio allocation will be decided based on the custodial balances of the assets held on Coinbase by its consumers.
“Our crypto asset investment allocation will be driven by our aggregate custodial crypto balances — meaning our customers will drive our investment strategy. Our investments will be continually deployed over a multi-year window using a dollar-cost averaging strategy.”
Digging deeper, we can make some estimates on the size of the bitcoin allocation that will be made by Coinbase using exchange balances and the numbers reported in the company’s recent Q2 earnings report.
The Q2 report which was just released on August 10, 2021, and reported numbers ending on June 30, 2021.
The company reported having $180 billion worth of assets held on the platform at the conclusion of the second quarter, and using data from Glassnode, we can see that there was approximately $90 billion worth of bitcoin held on Coinbase at the same date.
While this number is most definitely dynamic, this would mean that Coinbase is going to be allocating 50% of the committed $500 million into bitcoin, and 5% of the quarterly net income into bitcoin quarterly.
Last quarter, Coinbase pulled in $1.6 billion in net income, which would translate into approximately an $80 million purchase.
Discussing Bitcoin mining accessibility for the masses with Whit Gibbs of Compass Mining.Watch This Episode On YouTubeListen To This Episode:AppleSpotifyGoogleLibsynOvercastIn this episode of "The Bitcoin Magazine Podcast," host Christian Keroles was joined by Whit Gibbs, the cofounder and CEO of Compass Mining. Compass Mining's mission is to support hash rate growth and network security by…
Listen To This Episode: Apple Spotify Google Libsyn Overcast In this episode of the Bitcoin Magazine Podcast, Technical Editor Aaron van Wirdum speaks with Jim Epstein, the executive editor of Reason TV. Epstein recently produced a documentary miniseries on the cypherpunk movement, a precursor to Bitcoin itself, called “Cypherpunks Write Code.” The four-part series chronicles…
“Mad Money” host Jim Cramer’s announcement that he sold bitcoin to pay a mortgage demonstrates lack of monetary economic understanding.This week, CNBC host Jim Cramer announced that he had sold half of his bitcoin to pay off a mortgage. "It was like phony money paying for real money,” he said. “I think I won."While Cramer,…
Traditionally, hard money has the two main qualities of autonomy and correlated-redeemability, but bitcoin has the former without the latter.This is an opinion editorial by Rowdy Yates, a former Marine and practicing lawyer. What’s It Backed By?One of the most common criticisms from nocoiners remains, “But bitcoin isn’t backed by anything.” This criticism targets bitcoin’s…
Bitcoin’s attributes leave it well-positioned to help facilitate an end to a genocidal war in Ethiopia.This is an opinion editorial by Michael Abraha, a contributor to Bitcoin Magazine.As the world has quickly shifted its attention to Ukraine, the ongoing genocidal war in Tigray, Ethiopia, has continued for almost 17 months. This underreported war hasn’t seen…
In a significant move to broaden its international reach, Bitcoin Magazine, in collaboration with White Rock Management, announced the opening of its new office in Lugano, Switzerland, on February 14, 2024. This strategic expansion into the heart of Europe underscores the publication's commitment to fostering Bitcoin adoption and education across the globe.Lugano, a city that
Listen To This Episode: AppleSpotifyGoogleLibsyn On this episode of the “Bitcoin Magazine Podcast,” host Christian Keroles sat down with Randy Brito, the cofounder and CEO of the Locha Mesh project. Brito is a diehard Bitcoiner who has escaped persecution in Venezuela and is working every day with the mission to make Bitcoin more and more…
Summary: Bitcoin has had an aggressive, unrelenting, parabolic rise over the last few weeks. The parabola is becoming so aggressive that it has stopped creating zones of consolidation and failed to establish fresh zones of support. It’s unclear where this parabolic growth will top, but what is clear is the parabola will soon blow off…
Performance Of Various Asset Types Over Time Not all assets are created equal. Some appreciate in value, some lose value over time. This is obvious with things we consume, like the groceries we eat or the clothes we wear. But the same is true of assets that don’t visibly deplete but nevertheless lose value over…