‘I Overestimated’—Coinbase CEO Admits He Made a Big Mistake After $2 Trillion Bitcoin, Ethereum and Crypto Price Crash

‘I Overestimated’—Coinbase CEO Admits He Made a Big Mistake After  Trillion Bitcoin, Ethereum and Crypto Price Crash

BitcoinBTC
ethereum and other major cryptocurrencies have suffered an almighty crash this year with around $2 trillion wiped from the crypto market in just 12 months (despite Elon Musk giving the crypto market a surprise boost).

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The bitcoin price has fallen to around $20,000 per bitcoin, down from a peak of nearly $70,000, while the ethereum price has fallen to $1,500 per ether, crashing from a high of nearly $5,000. Crypto prices have fallen along with stock markets this year as the Federal Reserve battles persistently high inflation — though some believe that may be about to change.

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Now the CEO of major crypto exchange Coinbase, Brian Armstrong, has admitted that he “overestimated” bitcoin’s potential as an inflation hedge, admitting that it “looks like we’re a little premature.”

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“Honestly, I’ll admit, I overestimated the chances that bitcoin would be this inflation hedge in this macro environment,” Armstrong said, speaking on Coinbase’s internal podcast alongside crypto influencer Anthony ‘Pomp’ Pompliano. “I thought it might actually draw more attention to bitcoin in this kind of environment, but it looks like we’re a little premature.”

Bitcoin, created as a digital alternative to cash, has developed a reputation as an inflation hedge in recent years, with investors betting it will gain market share from gold.

Ahead of the rise in inflation over the past two years, famed investor Paul Tudor Jones named bitcoin as the “fastest horse to beat inflation” in May 2020, becoming one of the first major investors to bet on bitcoin.

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“Typically in lower macro environments, we see there’s a flight to safety,” Armstong said. “In the traditional economy, it was always gold, commodities, things like that. But I think what we’ve realized in this downturn is that the crypto economy is just not a significant enough percentage of the global economy, the broader economy yet, to actually be treated as the digital gold in the sense that people are flying to the safety of bitcoin.”

The crypto market, of which bitcoin makes up about 40%, surged to $3 trillion late last year after the Federal Reserve and other central banks pumped unprecedented amounts of stimulus into the system to help the economy weather Covid-induced shutdowns.

Coinbase, which made its Nasdaq debut in April 2021 when the price of bitcoin was trading near its all-time highs, has seen its stock crash along with the price of bitcoin, ethereum and other major cryptocurrencies. Coinbase stock is currently trading 80% off its list price.

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However, many in the bitcoin and crypto community remain optimistic about bitcoin’s long-term prospects despite the recent downturn.

“Bitcoin’s stability and ability to maintain upward momentum amid volatile market conditions is arguably more of a boon for the leading cryptocurrency than drastic price movements,” said Matt Senter, chief technology officer at bitcoin rewards app Lolli, in emailed comments. points to the performance of the bitcoin price compared to the stock markets in recent months.

“Bitcoin’s stability suggests its future widespread use as a safe, anti-inflationary global currency, especially compared to the weak performance of many fiat currencies plagued by inflation. Furthermore, in uncertain market conditions, investors are looking to store their wealth in relatively stable , safe investments that bitcoin is proving to be.”

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