While Brian Armstrong may not have the swagger of Jeff Bezos, the audacity of Mark Zuckerberg, or Elon Musk’s cult of personality, it's evident that the Coinbase CEO now exhibits the same vision and leadership that have elevated those other founders to tech industry legend status. It's time to acknowledge the 42-year-old Armstrong's accomplishments.
TL;DR
- Brian Armstrong, CEO of Coinbase, is recognized as a top Silicon Valley leader due to the company's success.
- Armstrong's vision and leadership have positioned Coinbase as a dominant force in U.S. Crypto for nearly 15 years.
- Coinbase's earnings show expansion beyond trading, with significant profits from stablecoins, staking, and custody.
- Despite past errors, Armstrong demonstrates a capacity to learn and adapt, facing new challenges from international competitors.
I recently met with The Coinbase CEO at a Goldman Sachs gathering held north of San Francisco. While many executives aren't fond of media interviews, Armstrong becomes animated when he can talk about significant concepts in crypto and technology. This happened when I inquired about the rapidly changing landscape of wallets—which Armstrong predicts will replace web browsers—and the possibility of crypto-powered identity verification, something he anticipates will be available shortly.
Armstrong has been right about calls like this in the past. Way back in 2016, he shared a “master plan” that envisioned blockchain evolving into a multi-pronged industry that touched hundreds of millions of people. It seemed fanciful at the time, and even more so when Crypto Winter set in and Bitcoin nose-dived to $2,000 the next year. Today, that far-flung prediction has come true. This ability of Armstrong to see where crypto is going, and to position his company accordingly, is a big reason why Coinbase has been the dominant company in U.S. Crypto for nearly 15 years.
Coinbase's third-quarter earnings report, published Thursday, demonstrates the company's expansion beyond trading income, generating substantial earnings from services such as stablecoins, staking, and custody. Furthermore, Coinbase consistently reports significant profits each quarter.
A primary factor behind this success is Armstrong's ability, mirroring that of other accomplished CEOs, to assemble a proficient executive leadership team. In contrast to Coinbase's tumultuous early period, characterized by conflict and internal strife, the company now exhibits a notable degree of stability. This stability is largely attributable to the reliable leadership of CFO Alesia Haas and President and COO Emilie Choi, whose expertise in MA has established Coinbase as a crucial entity across the entire cryptocurrency landscape. The company's recent acquisition of Deribit, a derivatives exchange, and its highly profitable perpetual futures operation, appears particularly astute.
Armstrong, much like other forward-thinking CEOs, has shown a readiness to adopt positions that are both unpopular and go against prevailing trends. This includes his refusal of the “blockchain not Bitcoin” trend during the crypto downturn in 2015, and his dismissal of the New York Times when that publication labeled Coinbase as racist for its refusal to yield to the demands of extreme political correctness.
Armstrong has also committed some significant errors. In 2022, he wasted funds on several Hollywood vanity projects while Coinbase needed to be readied for an industry slump. More recently, a terrible choice to move service operations to India resulted in a costly hack. However, even top CEOs aren't always successful—consider Zuckerberg's metaverse or Musk's Tesla 3 launch. Like them, Armstrong has demonstrated a capacity to learn from his missteps.
His CEO capabilities will face fresh challenges in the upcoming year. Coinbase's most significant international competitors, Binance and Tether, are preparing to expand their U.S. Activities, and the firm must demonstrate its ability to sidestep the red tape and excessive corporate size that often affects established companies. However, considering past performance, it would be unwise to dismiss Armstrong.
Jeff John Roberts
[email protected]
@jeffjohnroberts
DECENTRALIZED NEWS
Mastercard eyes a stablecoin startup: The credit card behemoth was unsuccessful earlier this month in its attempt to purchase stablecoin startup BVNK, with Coinbase ultimately winning out. It's now targeting a different stablecoin firm, Zerohash, which is located in Chicago. The estimated acquisition cost, ranging from $1.5 to $2 billion, indicates a sense of fear of missing out.Coins2Day)
JPM hearts blockchain: The largest U.S. Bank has added a private equity fund to its internal Kinexys Fund Flow system. This product is exclusively for affluent customers, yet it seems to be a component of a wider tokenization effort designed to utilize blockchain's inherent efficiency and clarity for marketing alternative investments to everyday consumers.WSJ)
Fight fight fight: The corporate entity managing President Trump's memecoin is reportedly in discussions to purchase Republic, a crowdfunding platform utilizing blockchain technology. This acquisition aims to integrate $TRUMP into its services for handling fees and securing capital.Bloomberg)
CZ vs. Liz Warren: Binance's founder indicated he'd pursue legal action for libel due to statements made by The Democratic senator, who claimed he “pleaded guilty to a criminal money laundering charge.” Warren’s team responded that he has no case because the statement is accurate and, regardless, cannot be sued over.The Block)
Crypto ETFs Part II: Investors can now purchase Solana, Litecoin, and Hedera through an ETF following recent SEC approvals. While the Bitwise Solana Staking ETF (BSOL) saw approximately $50 million in daily trading volume, the other two offerings performed poorly.Coins2Day)
MAIN CHARACTER OF THE WEEK
This week, Blockworks CEO Jason Yanowitz, also known as Yano, took center stage after abruptly closing the company's respected newsroom. While the media industry is notoriously challenging, Yano's strategy to rebrand Blockworks as a data analytics company isn't guaranteed to succeed. This is particularly true for a CEO recognized for his marketing skills rather than his technical expertise.
MEME O' THE MOMENT
Brian Armstrong sparked discussion on Crypto Twitter by Concluding Coinbase's earnings call with a sequence of words that showed up in “will he say it?” Bets on prediction markets. While some expressed concern over the ethical aspects, others, recognizing the comical nature of the situation, simply found it amusing.