Coinbase, the largest cryptocurrency exchange in the United States, announced that it enabled one of the largest institutional purchases of Bitcoin (BTC) in 2020.
According to an official announcement, Coinbase has been selected as the Lead Execution Partner for the $ 425 million purchase of Bitcoin from MicroStrategy in September 2020.
Brett Tejpaul, Head of Institutional Sales at Coinbase, posted more details on the purchase and the company’s goal to facilitate institutional purchases in a blog post on December 1.
“With our advanced execution capabilities, the leading world-class cryptocurrency brokerage platform, and OTC service, we were able to buy a significant amount of Bitcoin on behalf of MicroStrategy without changing the market.”Said Tejpaul. According to the post, MicroStrategy chose Coinbase because the platform offers a range of market tools such as intelligent order routing and algorithmic trading tools.
According to a case study of MicroStrategy operations Coinbase conducted a series of pre-trade meetings with MicroStrategy prior to the $ 425 million purchase to better understand trade execution goals and develop a trade plan.
After a successful test Coinbase began executing the largest trade that includes the Time Weighted Average Price algorithm to execute the trade over a five day period.
While operating, MicroStrategy received a call at 9 a.m. With the Coinbase trading team every day to start trading and report overnight refills. After making an initial investment of $ 250 million over a five-day period, MicroStrategy invested an additional $ 175 million in Bitcoin after the success of the initial operation, for a total investment of $ 425 million.
In the post, Coinbase expressed its willingness to help more institutions looking to buy cryptocurrencies:
“We hope this is a turning point for the cryptocurrency and look forward to helping more companies and corporate institutions diversify their capital allocation strategies with cryptocurrencies. By working as an agency, clients can be sure that our interests are aligned as we seek the best rates available on the market. “