Coinbase Holds Nearly $1B in BTC Despite Conservative Strategy

Coinbase chose not to adopt a Bitcoin-centric treasury strategy over concerns it could conflict with its core business operations, according to CEO Brian Armstrong.

Speaking in a Bloomberg interview on May 9, Armstrong revealed that Coinbase had considered converting up to 80% of its balance sheet into Bitcoin, similar to MicroStrategy’s approach, but ultimately decided against it. The reason: such a move could undermine Coinbase’s liquidity and operational flexibility.

Chief Financial Officer Alesia Haas added that Coinbase deliberately avoided major crypto bets to maintain neutrality with its users and avoid competing with customers by favoring any particular asset.

Still, Coinbase has some exposure to Bitcoin. Its Q1 2025 earnings report disclosed a $153 million crypto purchase, primarily in BTC. The company now holds 9,480 BTC, worth nearly $1 billion, making it the ninth-largest corporate holder of Bitcoin globally.

While Coinbase remained cautious, other firms—including MicroStrategy, Tesla, and Marathon Digital—have adopted more aggressive strategies, using both equity and debt to acquire large Bitcoin reserves. In total, over 100 public companies, 40 ETF issuers, and 12 countries now hold Bitcoin.

Deribit Acquisition Boosts Coinbase’s Derivatives Reach

Coinbase also finalized a $2.9 billion acquisition of Deribit, the largest crypto merger to date. Deribit is a leading crypto derivatives exchange that processed over $1 trillion in trading volume in 2024 and holds $30 billion in open interest.

The acquisition strengthens Coinbase’s global footprint in derivatives, a segment it previously accessed through offshore platforms in Bermuda.

Mixed Q1 Earnings: Revenue Up, Profit Down

Coinbase reported Q1 2025 revenue of $2 billion, a 24% year-over-year increase, though down 10% from the previous quarter. Despite revenue growth, net income fell 94% to $66 million, mainly due to crypto asset write-downs and increased marketing costs.

The company’s subscription and services revenue rose 37% to nearly $700 million, reflecting its shift toward non-trading products. Adjusted earnings came in at $1.94 per share, down from $2.53 the year prior. Operating expenses surged 51% to $1.3 billion.

Despite earnings pressure, Coinbase reported its second-highest ever monthly user count, with CFO Haas citing rising demand for staking and custodial services.