Bitcoin Treasury Dilemma: Why Coinbase Chose Against Strategy-Like Approach
Coinbase, the largest US cryptocurrency exchange, considered adopting a Michael Saylor-like Bitcoin strategy for its treasury but ultimately decided against the approach due to risk concerns. According to Bloomberg, Coinbase CEO Brian Armstrong revealed on May 9 that the company contemplated allocating 80% of its balance sheet to Bitcoin on multiple occasions over the past 12 years. Armstrong explained that this decision was driven by concerns about financial stability and potential threats to the company's core exchange business.
The revelation comes amid growing corporate Bitcoin adoption trends in 2025, with over 100 public companies now holding Bitcoin on their balance sheets. Coinbase currently maintains 9,480 Bitcoin worth approximately $988 million, representing the majority of its $1.3 billion in crypto asset holdings, making it the ninth-largest corporate Bitcoin holder globally, according to TradingView.
Corporate Bitcoin Treasury Approaches
Michael Saylor's Strategy (formerly MicroStrategy) has pioneered the corporate Bitcoin treasury model since 2020, accumulating over 555,450 Bitcoin worth $38 billion by May 2025. According to CoinDesk, Strategy has funded these purchases through multiple financing mechanisms, including convertible notes, equity offerings, and common stock sales. The company's aggressive Bitcoin acquisition has transformed it from a business intelligence firm into a Bitcoin-focused entity, with Saylor serving as Bitcoin's most visible corporate advocate.
Corporate treasuries traditionally allocate capital to low-risk assets like bank deposits, treasury bills, and commercial paper. Bitcoin represents a significant departure from this approach, offering potential inflation protection but introducing substantial volatility. Fidelity Digital Assets notes that economic factors like inflation, interest rate uncertainties, and geopolitical risks have driven companies to reconsider conventional treasury strategies since 2020.
Coinbase Chief Financial Officer Alesia Haas, who participated in the May 9 video call, added that the company wanted to avoid directly competing against its customers over cryptocurrency price performance. This reflects the exchange's position as a market infrastructure provider rather than a Bitcoin speculator. Kanalcoin reports that experts suggest Coinbase's diversified treasury offers protective benefits in volatile markets.
Market Impact and Financial Performance
Coinbase's conservative approach to Bitcoin holdings contrasts with its recent strategic moves to expand its business. On May 8, Coinbase announced the acquisition of crypto derivatives platform Deribit for $2.9 billion, marking the largest deal in cryptocurrency sector history. This acquisition will significantly boost Coinbase's presence in the derivatives market, with Deribit processing over $1 trillion in trading volume in 2024 and maintaining approximately $30 billion in current open interest, according to CoinGape.
Despite avoiding a Saylor-like Bitcoin strategy, Coinbase maintains substantial cryptocurrency investments. The company purchased $153 million worth of crypto in the first quarter of 2025, primarily Bitcoin. Coinbase reported Q1 2025 revenue of $2.03 billion, a 24.2% year-over-year increase, though this fell short of analyst expectations of $2.12 billion. The company's adjusted earnings were $527 million, or $1.94 per share, according to CNBC.
Trading volumes on Coinbase declined in Q1, with consumer trading volume dropping 17% to $78.1 billion compared to the previous quarter. This decline occurred despite positive cryptocurrency market developments, including Bitcoin reaching an all-time high in January. SiliconAngle reports that Coinbase generated approximately $240 million in transaction revenue in April alone, with second-quarter subscription and service revenue expected between $600 million and $680 million.
Bitcoin Treasury Implications for Corporate Finance
The corporate Bitcoin treasury trend continues to gain momentum in 2025, with regulatory clarity and governmental support contributing to increased adoption. PYMNTS reports that the Trump administration's progress toward implementing regulatory frameworks for cryptocurrency has given CFOs more confidence in managing Bitcoin's financial reporting and compliance risks.
Companies adopt Bitcoin treasury strategies for various reasons, including inflation protection, portfolio diversification, and reduced reliance on traditional financial institutions. Consultancy-ME explains that businesses must balance the benefits against Bitcoin's volatility, regulatory challenges, and the operational complexities of managing digital assets.
Alternative approaches to Strategy's all-in Bitcoin model have emerged. Strive Asset Management recently announced a multi-layered Bitcoin treasury framework designed to outperform Bitcoin on a per-share basis. According to Bitcoin Magazine, their model incorporates tax advantages, capital markets expertise, and balance sheet engineering to maximize Bitcoin per share rather than total holdings.
Market observers note that Coinbase's decision against an aggressive Bitcoin treasury strategy reflects its assessment of risk versus reward in its specific context. While Strategy's approach has yielded substantial returns during Bitcoin's price appreciation, Coinbase has opted for capital preservation and strategic business development through acquisitions like Deribit.
