Coinbase says it was behind MicroStrategy's $425 million bitcoin purchase

Quick Take

  • Coinbase announced Tuesday that it served as the primary execution services partner for MicroStrategy’s bitcoin purchase
  • The purchase took several days and was executed by leveraging humans and algorithms to limit the market impact

Business software company MicroStrategy became crypto's newest darling after it announced it would allocate a sizable chunk of its balance sheet to bitcoin as part of a treasury reserve strategy. In the background, a more familiar face pulled the strings for the purchase: Coinbase. 

In an announcement shared with The Block, the San Francisco-based cryptocurrency exchange said its Coinbase Prime unit which spans prime brokerage and over-the-counter (OTC) trading services — served as the primary execution services partner for Virginia-based MicroStrategy's $425 million bitcoin purchase made earlier this year. 

"Using our advanced execution capabilities, leading crypto prime brokerage platform, and OTC desk, we were able to buy a significant amount of bitcoin on behalf of MicroStrategy and did so without moving the market," Brett Tejpaul, head of institutional sales, custody and prime services at Coinbase, said in a blog post. 

Count this as a big win for Coinbase. Across the crypto market, firms are scrambling to link up with new market entrants—including firms looking to buy bitcoin themselves or offer crypto services to their clients. Fidelity Digital Assets, DCG's Genesis Global Trading, and BitGo are among the other firms offering execution and prime-like services in the nascent market. 

The trend of public companies adding bitcoin to their balance sheets has become a popular talking point among crypto enthusiasts, who say the move could help propel bitcoin to new highs. Jack Dorsey's Square provides another example, having purchased $50 million worth of bitcoin as part of a bet that it could become a "more ubiquitous currency in the future."

"We hope that this is an inflection point for the cryptoeconomy and look forward to helping more corporate companies and institutions looking to diversify their capital allocation strategies with crypto," Tejpaul said of recent news by Square and MicroStrategy.

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