American based regulatory compliant cryptocurrency exchange, Coinbase has announced that it executed one of the largest Bitcoin purchase by an institutional investor.
Coinbase was selected as the primary execution partner by MicroStrategy to purchase a record $425 million worth of Bitcoin in September 2020 according to an official announcement by the crypto exchange.
Surprisingly the purchase was made in bits and they successfully completed the purchase without moving the Bitcoin market using advanced execution capabilities, leading crypto prime brokerage platform and OTC desk.
Brett Tejpaul, Coinbase Head of Institutional Sales, Trading, Custody and Prime Services said in a blog post:
Our system takes a single large order and breaks it into many small pieces that are executed across multiple trading venues. This type of smart order routing minimizes the trade’s market impact and helps disguise the overall trade size. Leveraging our technology, the trading team achieved an average execution price that was less than the price at which buying started.
In periods of high volatility, our advanced trading tools improved the client execution by as much as 1%. For MicroStrategy, this strategy resulted in savings of approximately $4.25 million.
Coinbase via the blog post expressed it’s willingness to help more institutional investors looking to buy crypto, as this can be a monumental step in growing the cryptoeconomy and taking crypto mainstream.
It took five days to complete an initial $250 million worth purchase of Bitcoin. After a successful execution of the first trade, MicroStrategy went on to purchase an additional $175 million worth of Bitcoin to bring the total investment to $425 million.