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Coinbase CEO enjoys crypto bear markets, says they clear the air

Posted: 20 June 2018 7:45 pm
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Cryptocurrency isn't only about the prices, except when it is.

A lot of cryptocurrency companies made a lot of big plans around the end of 2017. Exchanges in particular drew up grand scaling plans after being hammered across the board by way more demand than they could keep up with.

Coinbase made bigger plans than most, with a stated goal of becoming the "Google of cryptocurrency" through a similar strategy of diverse acquisitions. This has necessitated a lot of hiring, and Coinbase has managed to pull in a lot of talent with some undoubtedly good offers.

However, the sustained sluggishness of the cryptocurrency markets after last December's froth might be putting off some of the new hires to the extent that Coinbase CEO Brian Armstrong shared a message with his team, re-published on Twitter, about setting aside the prices to focus on the technology and the loyal customers.

"The crypto industry is like no other I've seen – lots of up and down cycles (reaching a new plateau each time). There have been 3 or 4 of these now. It can be scary the first time you see it, but to us who have been in the industry for many years, it feels like old news," he said. "When there is hype, people are irrationally exuberant. When there is despair, people are irrationally pessimistic. Neither is true. Reality is always somewhere in the middle, more correlated with real usage (transactions per day) than the price.

"I want to encourage you all to ignore the price of crypto and the headlines which will inevitably start to come up. Our job is to rise above that, finding our own intrinsic source of motivation, to come in and do our best work, regardless of what other people think... Together we can stay focused on the long term, and shift the world toward an open financial system."

He also said that after seeing so many ups and downs, he's come to appreciate the downside more. He likes how it clears the air of the get rich quick crowd and can be used as an opportunity to make progress.

"After many years of this, I've come to enjoy the down cycles in crypto prices more. It gets rid of the people who are in it for the wrong reasons, and it gives us an opportunity to keep making progress while everyone else gets distracted. We use the down cycles to build a strong foundation so we can thrive in the next growth cycle."

This foundation has been key to Coinbase's growth so far. When money essentially started raining from the sky last December, the only real limit for any exchange was how much of it their systems could pick up.

It became a game of chicken with sheer volume where letting too many customers in would cause platforms to crash, and where exchanges were faced with the choice between accepting fiat to pick up more first-time customers or going crypto only to onboard customers faster by avoiding the strictest AML/KYC obligations. By the time bitcoin crashed past $10,000 on the upswing, exchanges were turning away new customers just to make a dent in their backlogs.

The best systems were in the best position to pocket most of the new money in the space. Thanks to its longevity – Coinbase was founded in 2012, making it ancient by crypto standards – and the many downswing development cycles it has been through, Coinbase was one of the biggest beneficiaries of the December hype. It made about $1 billion in revenue in 2017, and almost half of that came from December alone. If and when there's another major crypto run, Coinbase plans to be prepared.

Along with the pep talk, Armstrong also shared a graph illustrating bitcoin's bubbly history, and demonstrating that so far what goes down must go up. Of course blatant price manipulation almost certainly contributed greatly to all of those rises from the earliest in 2013 to the most recent in 2017, but let's not sweat the details.


As Armstrong said, cryptocurrency isn't about the prices and he posted this big price chart to show just how unimportant the prices are. And naturally, it's least about prices whenever prices are down. But again, let's not sweat the details.

Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VET, XLM, BTC and NANO.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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