Coinbase Revealed as MicroStrategy Bitcoin Facilitator

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  • Coinbase has announced that it helped broker MicroStrategy’s $250 million Bitcoin purchase in September
  • The exchange has revealed some of their methodology in a blog post published yesterday
  • MicroStrategy’s Bitcoin holding has increased in value from $435 million to $707 million in a few weeks

U.S. exchange Coinbase has been revealed as the facilitator of MicroStrategy’s mammoth $250 million Bitcoin purchase in September. Coinbase revealed their role in a blog post yesterday which outlined why they were chosen and how they went about securing the huge purchase without impacting the market. The company’s success in the venture will act as a great advert for the plethora of companies known to be looking to follow MicroStrategy into hedging against a weakening dollar by buying Bitcoin.

Coinbase Used a Variety of Methods to Quietly Conduct the Trade

Coinbase announced in the blog post that it was selected as the “primary execution partner” for MicroStrategy’s purchase of 21,454, which the software company revealed in September. Coinbase Head of Institutional Sales, Trading, Custody and Prime Services Brett Tejpaul stated that Coinbase used its “advanced execution capabilities, leading crypto prime brokerage platform, and OTC desk” to facilitate the transaction.

Tejpaul added that Coinbase took the single order and broke it into “many small pieces” that were “executed across multiple trading venues.” This was done to minimize the trade’s market impact and help disguise the fact that a massive buy was going on at all.

MicroStrategy Holdings Now at $707 Million

The methods employed by Coinbase “achieved an average execution price that was less than the price at which buying started”, resulting in a saving to MicroStrategy of $4.25 million. MicroStrategy followed up this purchase with a second one around a month later, giving them 38,250 at a total cost of $425 million.

This has proved to be a shrewd investment, as the value of their Bitcoin holding has since ballooned to $707 million.