U.S. cryptocurrency exchange Coinbase said on Tuesday that it represented Microstrategy’s $425 million purchase of bitcoin earlier this year. So far, it is unclear who contributed to the deal.
Coinbase revealed in a transaction case study that Microstrategy purchased the first $250 million in Bitcoin (BTC) in August and the transaction was executed for five days.
The transaction completed through the brokerage department of the exchange called Coinbase Prime used human and trading algorithms to cut Microstrategy orders into 200,000 orders. It says that the size of each padding is less than 0.3 BTC on average.
Cutting the main order into smaller orders that span multiple liquidity pools helps “minimize the price impact… [and] Without disturbing the market”, while saving Microstrategy US$4.25 million.
“By using our advanced execution capabilities, leading cryptocurrency major brokerage platforms and OTC service desks, we were able to purchase a large amount of Bitcoin on behalf of Microstrategy and made purchases without moving the market,” Institutional Sales, Custody and Trading Director Brett Tejpaul said in a blog post that Coinbase’s main service.
Microstrategy is a NASDAQ-listed business intelligence and software company with a market value of US$3.02 billion. Since it decided to invest in Bitcoin as a reserve asset, it has become a central topic in the cryptocurrency industry, injecting US$425 million in virtual currencies.
The purchase was carried out in two stages, and the second purchase of US$175 million was executed in late September. Microstrategy CEO Michael Saylor described Bitcoin as a “reliable store of value and attractive investment asset, with more long-term appreciation potential than holding cash.”
Microstrategy seems to have had an impact on some listed companies seeking to provide alternatives to safe-haven assets in addition to traditional cans (such as gold). Square (Square), a company owned by Jack Dorsey, bought its own Bitcoin for $50 million after investing in Microstrategy.
Several listed companies are now pouring into BTC, which has helped the asset’s price break through an all-time high. Coinbase hopes to profit from institutional investors who plan to buy bitcoin in large quantities.
Tejpaul said: “We hope this is a turning point in the crypto economy and look forward to helping more companies and institutions that want to diversify their capital allocation strategies through crypto.”
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