8
Brian Armstrong, CEO of the US-based cryptocurrency exchange Coinbase, said that the recent sharp drop in Bitcoin was primarily due to investor psychology, not macroeconomic or structural factors.
Speaking to CNBC at the World Liberty Forum in Florida, Armstrong rejected the view that the price decline was linked to speculation about Fed management or quantum computing risks.
According to Armstrong, investors are mostly taking profits and positioning themselves based on expectations of what the rest of the market will think. “Cryptocurrency sometimes goes up, sometimes it goes down,” Armstrong said, adding that the current pullback is likely temporary. He noted that Coinbase has been conducting share buybacks and buying Bitcoin at lower levels during this period, indicating that the company is focusing on its long-term strategy. He also added that Bitcoin remains the best-performing asset of the last decade.
Armstrong also responded to the question posed to him on social media: “Why is Coinbase constantly misunderstood or underestimated by Wall Street?” Arguing that Coinbase is a classic example of the “innovator’s dilemma,” Armstrong stated that there is a divided picture within the traditional financial world.
According to Armstrong, some of the world’s largest and smartest financial institutions are actively embracing the crypto sector. He noted that the Five Global Systemically Important Banks (GSIBs) have begun working with Coinbase, and that with the regulatory framework becoming clearer, approximately 50% of large financial institutions are moving towards integrating crypto. However, he added that the other half are still lagging behind and resisting.
Armstrong stated that the crypto sector is directly transforming Wall Street, and reminded that historically, disruptive innovations such as Uber, Airbnb, AI applications, and SpaceX have faced similar resistance. He conveyed the message, “Those who are smart will adapt, those who lag behind will be eliminated.”
Armstrong argued that Coinbase, and the crypto industry in general, is in a stronger position than ever before. He stated that investors need to be “early and right” to achieve above-market returns, adding that Coinbase’s value is still not fully understood by traditional analysts.
Armstrong also commented on the company’s financials, stating that GAAP net profit figures include unrealized gains and losses on crypto assets, and therefore adjusted net profit should also be considered. He noted that Coinbase was profitable in the last quarter despite challenging market conditions, adding that this has sometimes been misrepresented in the media.
*This is not investment advice.
coindesk.com