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Coinbase Boss Brian Armstrong Sees Crypto Revolutionizing Business Operation

Last Updated February 21, 2024 1:12 PM
Teuta Franjkovic
Last Updated February 21, 2024 1:12 PM

Key Takeaways

  • Crypto is becoming a standard asset in portfolios, says Coinbase CEO.
  • Institutions could use crypto for wider financial operations beyond investment.
  • Record inflows into Bitcoin ETFs and Ethereum ETFs are on the horizon.

Coinbase CEO Brian Armstrong said  that crypto was “becoming a staple in every institution’s portfolio”. In doing so, Armstrong highlighted its evolution into a standard asset class for diversification.

Additionally, Armstrong pointed out  institutions will broaden their use of crypto for various financial operations, including balance sheet management, vendor payments, and payroll processing.

Armstrong Foresees Crypto as Essential in Institutional Portfolios

Armstrong emphasized the growing importance of cryptocurrency.

He further suggested that institutions were set to expand their cryptocurrency utilization across numerous financial activities.

He said :

“So in preparation for this launch, we won 8 of 11 spot Bitcoin custody mandates from issuers, and today Coinbase Custody is about 90% of the $36 billion in Bitcoin ETF assets as a result.”

This development will introduce fresh capital into the cryptocurrency market, with Coinbase taking a central role. The company is generating income through custody, trading, and financing services. Demand for Bitcoin has increased significantly, making it the second-largest ETF commodity in the US, ahead of silver.

Record-Breaking Inflows into BTC ETFs and Future ETH ETF Plans

Armstrong has also noted the cryptocurrency industry has experienced over $4 billion in net inflows into spot Bitcoin ETFs.

These funds have achieved growth milestones at an unprecedented pace, surpassing the $3 billion mark in a matter of weeks—a feat that took gold ETFs a year to accomplish after their launch in November 2004. Armstrong views this as just the start, with the industry beginning to expand into Ethereum ETFs.

Coinbase has been selected as the custodian for the majority of these upcoming ETH ETF applications.

Armstrong explained: 

“So across the entire industry, we’ve seen over $4 billion of net inflows into spot bitcoin ETFs. The bitcoin ETFs are breaking records. When gold launched in November 2004, it took one year to get to $3 billion. These ETFs did that in a few weeks. So this is really an incredible start.”

Strategic Priorities for Revenue Growth and Crypto Utility

Armstrong laid out the company’s strategic priorities for the year, emphasizing the importance of enhancing revenue streams, particularly through trading fees and stablecoins.

Another key focus will be on increasing the utility of cryptocurrency, alongside efforts to advance regulatory clarity for the broader industry.

Armstrong also addressed concerns about market cannibalization. He asserted that the introduction of ETFs has been beneficial to the industry.

He said :

“What’s even more important is that every institution is now starting to hold crypto, the asset class will be a standard part of every diversified portfolio.”

Embracing Crypto Adoption Across Financial Systems

Armstrong has also expressed enthusiasm  for the growing integration of cryptocurrency within the financial system.

He observed  increased engagement and net inflows from both retail and institutional sectors in the first quarter, viewing ETFs as a wholly positive development for the industry. Armstrong also emphasized the importance of institutions beginning to engage with cryptocurrency, whether through ETFs or other means, predicting broader adoption for transactions, including balance sheet management, vendor payments, and payroll.

His vision extends to leveraging crypto to drive a larger portion of global GDP, advocating for every opportunity, including ETFs, to foster this growth, underscoring their significant positive impact on Coinbase’s business and the crypto ecosystem at large.

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