MicroStrategy‘s million-dollar investments in bitcoin were made through Coinbase.
The Head of Institutional Sales, Trading, Custody and Prime Services, Brett Tejpaul, said the company is excited to have been selected earlier this year as a partner for the purchase of $425 million in BTC over the months.
Tejpaul also says that these purchases were made without moving the market, thanks to smart order routing and advanced algorithms.
The technique used was to divide large orders into many small pieces that are then executed on multiple trading venues.
This minimizes the impact on the price, and helps to mask the overall size of purchases.
In fact, Tejpaul states that the average execution price of purchases was lower than the initial price, with an order execution improvement of up to 1% that would have saved MicroStrategy around $4.25 million.
MicroStrategy invested in Bitcoin through Coinbase
The $250 million initial investment would have taken place over a period of only five days in August, and would have been executed with Coinbase Prime.
The second took place in September with another $175 million, and MicroStrategy is now the first publicly-traded company to acquire a large amount of bitcoin to hold in its balance sheet as primary reserve.
Among other things, Coinbase reveals that it carried out “trial trades”, before proceeding with the actual purchase program, so that MicroStrategy could evaluate the data collected and analyze it. Once the trial trade was successful, the exchange was given the go-ahead by the company to proceed with the bulk of the investment, with an optimal rate to minimize the impact on the market.
This reveals that very advanced features are now readily available on the market for large investors wishing to trade these new assets in an intelligent and structured manner, making the crypto market itself within reach of even the most demanding investors.