Coinbase CEO: Following a Bitcoin Reserve Strategy "Is Too Risky"

BlockBeats News, May 12: Coinbase CEO Brian Armstrong revealed that the cryptocurrency exchange had considered allocating 80% of its balance sheet to Bitcoin, but abandoned the idea due to concerns that it could "kill the company." During a Q&A session with customers, executives were asked if they had missed the opportunity to accumulate BTC earlier, as the company started operations eight years before the software company Strategy.

Armstrong believed that Bitcoin's volatility meant that an aggressive strategy was too risky, especially in the early stages of Coinbase when key milestones needed to be achieved to unlock additional funding rounds. "If our runway suddenly shortened from 18 months to 12 months, or even 10 months, that could completely kill the company," Armstrong said.

He explained that when Coinbase was still a startup, executives made a "conscious choice" on risk because a significant BTC price drop at the wrong time would impact the exchange platform's growth. Nevertheless, Armstrong emphasized that the company does hold Bitcoin on its balance sheet, currently around 25% of net cash held in cryptocurrency. "We wouldn't put 80% into it; I think that would be too risky," he added.