Coinbase CEO Brian Armstrong has recently announced that the exchange is actively acquiring Bitcoin on a weekly basis, sparking speculation about the possibility of a treasury-building effort. Armstrong shared this update on June 27, revealing that Coinbase has adopted a “Long Bitcoin” strategy. However, he did not confirm whether these acquisitions are specifically aimed at forming a corporate Bitcoin reserve.
The timing of these weekly purchases has led many to believe that Coinbase may be moving towards establishing a formal Bitcoin treasury, following in the footsteps of companies like MicroStrategy, which converted a significant portion of its balance sheet into Bitcoin. This potential shift in strategy is surprising, as Coinbase has previously been hesitant to go all-in on Bitcoin.
In the past, Armstrong acknowledged that there were discussions within the company about allocating a substantial portion of its balance sheet to Bitcoin. However, the executives ultimately decided against it, citing concerns about the risks involved and the potential impact on the company’s financial stability during its early growth stages.
Despite Coinbase’s cautious approach in the past, recent developments in the corporate world indicate a growing trend towards integrating Bitcoin into financial strategies. Companies like Trump Media and Technology Group, Semler Scientific, and GameStop have all taken steps to embrace Bitcoin in various capacities.
However, experts have warned that the increasing number of firms adopting this strategy could pose risks to the industry. David Duong, Coinbase’s Head of Research, highlighted in a recent report that the accumulation of Bitcoin by public companies could lead to structural imbalances in the market, potentially increasing volatility and triggering ripple effects across trading platforms and investor portfolios.
Coinbase’s COIN stock recently reached a new all-time high of $369.21, a level not seen since November 2021. After-hours trading pushed the stock even higher to $375.25, reflecting the broader pro-crypto sentiment in the US. Investors are increasingly turning to digital assets and crypto-related equities as a hedge against global instability, driving interest in companies like Coinbase that offer indirect exposure to the crypto market.
As the discussion around Bitcoin treasury moves continues, Coinbase’s strong performance in the stock market reflects the growing interest in cryptocurrencies and related investments. The company’s strategic decisions regarding Bitcoin acquisitions will be closely watched as the crypto industry evolves.