How a lot Bitcoin will Coinbase purchase within the new reserve coverage?

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The following is from a recent issue of Deep Dive, Bitcoin Magazine’s premium market newsletter. To be among the first to get this insight and other Bitcoin market analysis delivered to your inbox, sign up now.

“We are committed to investing $ 500 million of our cash and cash equivalents in a diverse portfolio of crypto assets. In the future we will also allocate 10% of the quarterly surplus to this portfolio. ”- The Coinbase blog

In a tweet from Coinbase CEO Brian Armstrong on Thursday evening, it was announced that Coinbase will be buying $ 500 million in a “diverse portfolio of crypto assets” from the assets held by its consumers on Coinbase.

“Our crypto asset investment allocation is determined by our aggregated crypto account balances – which means our clients will drive our investment strategy. Our investments are continuously spread over a multi-year time window using a dollar-cost averaging strategy. ”

If we dig deeper, we can make some estimates of the size of the Bitcoin allotment being made by Coinbase using the wallet balances and the numbers in the company’s most recent earnings report for the second quarter.

The Q2 report, which was just released on August 10th, 2021 and whose numbers end by June 30th, 2021.

The company reported $ 180 billion worth of assets on the platform at the close of the second quarter, and based on data from Glassnode, we can see that approximately $ 90 billion worth of bitcoins were held on Coinbase at the same time.

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While this number is definitely dynamic, it would mean that Coinbase will invest 50% of its pledged $ 500 million in Bitcoin and 5% of its quarterly net income in Bitcoin every quarter.

In the most recent quarter, Coinbase posted net income of $ 1.6 billion, which would be the equivalent of a purchase of about $ 80 million.

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