They made the purchases of Bitcoin between August and September 2020. The Coinbase exchange provides services to large companies, as well as to retail investors.
In recent days, cryptocurrency exchange Coinbase revealed that it was responsible for purchasing USD 425 million worth of Bitcoin (BTC) for the American company MicroStrategy. They made the purchases of the cryptocurrency between August and September 2020.
“Using our advanced execution capabilities, we were able to buy a significant amount of Bitcoin on behalf of MicroStrategy, and we did so without moving the market,” said Brett Tejpaul, director of institutional sales at Coinbase.
Because it is a large purchase, the Coinbase system divided it into many parts that ran on multiple trading platforms, according to the executive. When they did this, “they minimized the impact on the market and helped to disguise the size of the operation,” Tejpaul said.
This method allowed for an average strike price that was lower than the price at the time of purchase, Tejpaul added. “This strategy delivered savings of about USD 4.25 million to MicroStrategy,” revealed the director of sales.
Thanks to the purchase of Bitcoin, MicroStrategy made, in just two months, profits higher than those that it earned in its last three years of operations. According to the company, Bitcoin shows “persuasive evidence of its superiority as an asset class for those seeking a long-term store of value.”
Tejpaul believes that Coinbase is ready to serve other companies that “seek cryptocurrencies to hedge or diversify their excess cash.” Investing in the pioneering cryptocurrency allows them to increase their income, especially during bullish runs.
“In our mission to create an open financial system, getting companies like MicroStrategy to recognize the value of cryptocurrencies can be monumental in the growth of the crypto economy. We hope that this is a turning point for the crypto economy, and we look forward to helping more companies and corporate institutions,” said Tejpaul.
Small Investors Can Buy Bitcoin
The trading strategy of Coinbase aims at both large companies and retail investors who want to buy Bitcoin or other cryptocurrencies. At the time of writing this article, Coinbase allows acquiring 36 different crypto assets from its platform. In addition to Bitcoin, they include Ether (ETH), Litecoin (LTC), Chainlink (LINK), Bitcoin Cash (BCH), Stellar Lumens (XLM), and the DAI Stablecoin.
According to Coinbase founder and CEO Brian Armstrong, “the open nature of cryptocurrencies is what makes them powerful tools for innovation.” For that reason, although his platform complies with all the requirements to operate legally, he considers that excess regulation creates friction in the industry.
The growing investment from institutional entities makes the relevance of Bitcoin and other cryptocurrencies as stores of value increasingly evident. The recovery of Bitcoin in recent days after an abrupt decline proves that it is capable of returning to its all-time highs even in the worst moments of crisis. Both wholesale and retail investors know this, which contributes to the rise of the foremost cryptocurrency in the market.
By Alexander Salazar
