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MicroStrategy’s investments in bitcoin made with Coinbase
MicroStrategy’s investments in bitcoin made with Coinbase
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MicroStrategy’s investments in bitcoin made with Coinbase

By Marco Cavicchioli - 1 Dec 2020

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MicroStrategy‘s million-dollar investments in bitcoin were made through Coinbase

This was revealed by the exchange itself, stating that Coinbase was selected as the primary partner for the execution of these investments by MicroStrategy.

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. 

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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