Coinbase Brokered MicroStrategy’s $425M Bitcoin Purchase, Exchange Says

Coinbase Brokered MicroStrategy’s $425M Bitcoin Purchase, Exchange Says
LOW KEY: MicroStrategy, led by Michael Saylor (left), hired Brian Armstrong's Coinbase to help it buy large quantities of BTC without moving the market.
(Getty Images/CoinDesk archives)

U.S. cryptocurrency platform Coinbase facilitated MicroStrategy’s $425 million bitcoin buy earlier this year, the exchange said.

In an announcement Tuesday, Coinbase revealed MicroStrategy’s investment, which occurred over a five-day period in August, came via Coinbase Prime, the exchange’s crypto brokerage arm formed following the in May.

That was followed up in September by a further investment from the Virginia-based business intelligence firm, bringing MicroStrategy’s total investment to $425 million in . MicroStrategy became the first publicly traded company to acquire a large chunk of bitcoin to hold on its balance sheet as a primary treasury reserve asset.

In retrospect, on-chain data suggests Coinbase was transacting with a large customer in the months leading up to MicroStrategy’s August announcement. A series of large quantities of bitcoin – nearly 80,000 in total – began moving out of Coinbase Pro’s reserve starting in the middle of the year and ending in the autumn. “Those outflows went to Coinbase Custody wallets (interoperated with over-the-counter wallets), not exchange wallets,” explained Ki Young Ju, CEO of analytics firm CryptoQuant, adding that Coinbase usually uses 8,000 BTC to make an initial custody wallet and requiring a minimum custody deposit of $10 million.

Michael Saylor, MicroStrategy’s CEO, did not respond to CoinDesk’s request for comment by press time. Coinbase’s announcement quoted him from as saying that investing in bitcoin is part of the firm’s “new allocation strategy.” The strategy aims to maximize long-term value for shareholders while reflecting the cryptocurrency’s use as a store of value with greater “appreciation potential than holding cash.”

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