U.S.-based cryptocurrency exchange Coinbase has revealed that bitcoin (BTC) and other crypto assets have been an important part of its corporate treasury since the company’s inception in 2012.
In a new announcement aimed at other companies, the exchange presented its own experience managing its treasury position in cryptocurrencies as a solid basis for advising other private and publicly traded companies on how to handle their own potential investments.
In a newly released, highly detailed Corporate Treasury FAQ, the Exchange provides a thorough overview of the types of investment, accounting, and tax policies that companies need to consider and adopt when diversifying their treasuries into cryptocurrencies.
The FAQ is both a general resource covering all types of regulatory, audit, technical and investment issues about crypto from a corporate investment perspective, as well as a pitch for companies to choose Coinbase in particular as a trade execution, advisory and professional custody partner.
The document also provides overviews of Bitcoin’s performance over the past few years from a macro perspective, showing how it compares favorably to other financial assets such as gold and the S&P 500. “Bitcoin’s strong absolute performance has compensated investors for its volatility,” the exchange notes. On a risk-adjusted basis, the asset has had a rolling annualized Sharpe ratio of 1.52 over the past five years, taking into account the 2018 bear market.
Corporate investments in cryptocurrencies, particularly Bitcoin, have made headlines in recent weeks due to Tesla’s $1.5 billion investment in the asset, resulting in rumored gains of up to $1 billion. Notwithstanding this extraordinary windfall, analysts have said that while they expect a ripple effect among companies following Tesla’s move, less than 5% of publicly traded companies are likely confident enough to invest at this time until there is more regulatory clarity.