Coinbase, the largest cryptocurrency exchange in the United States, announced that it enabled one of the largest institutional Bitcoin (BTC) purchases of 2020.
According to the official announcement, Coinbase was chosen as the top implementation partner for MicroStrategy’s $ 425 million acquisition of Bitcoin in September 2020.
Brett Tegbull, Coinbase’s head of corporate sales, provided additional information about the acquisition as well as the company’s goal to facilitate corporate purchases in a December 1 blog post.
“By using our advanced execution features, a leading crypto broker platform and an OTC desktop, we were able to purchase a large amount of Bitcoin on behalf of MicroStrategy and did so without moving the market,” said Tegbol. According to the post, MicroStrategy chose Coinbase because the platform provides a set of marketing tools such as smart order routing and algorithmic trading tools.
According to MicroStrategy’s business case study, Coinbase conducted a series of initial conversations with MicroStrategy prior to its acquisition of $ 425 million to better understand trade execution goals and develop a trading plan.
After successful testing, Coinbase began trading larger volumes using a time-weighted price algorithm to execute a trade within five days.
While trading, MicroStrategy contacted the Coinbase trading team every day to start trading and report a fill overnight. After completing an initial investment of $ 250 million over five days, MicroStrategy continued to invest an additional $ 175 million in Bitcoin after the success of the first deal with a total investment of $ 425 million.
In a post, Coinbase expresses its willingness to assist more organizations looking to purchase cryptocurrency:
We hope this will be a turning point in the cryptocurrency economy and we hope to help more companies and organizations looking to diversify their capital allocation strategies using cryptocurrency. On an agency basis, clients can rest assured that we have our best interests in mind when we try to find the best rates available in the market. “