Coinbase CEO: Every Institution Is Now Starting to Hold Crypto

Coinbase CEO Brian Armstrong says “every institution is now starting to hold crypto,” emphasizing that “the asset class will be a standard part of every diversified portfolio.” Moreover, the executive noted that institutions will eventually be using crypto in other ways, such as “holding it on their balance sheet, paying their vendors, [and] doing payroll.”

Brian Armstrong Shares Crypto Outlook

Coinbase CEO Brian Armstrong shared his outlook for the crypto industry and his exchange’s expected impact from spot bitcoin exchange-traded funds (ETFs) during last week’s Q4 earnings call.

“We’ve always said that ETFs would be a win-win for Coinbase, and we’re starting to see that play out on our platform,” Armstrong explained, elaborating:

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 will unlock new pools of capital to flow into the crypto space with Coinbase playing a key role here. We’re earning revenue, not just on custody, but also on trading and financing,” the Coinbase boss emphasized. “We’ve already seen great demand as bitcoin is now the second largest ETF commodity in the U.S., surpassing silver.”

Armstrong continued:

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,” the Coinbase CEO detailed. “This is really just the beginning. We’re now starting to see some of these issuers file for ethereum ETFs, for example. We’ve been named as the custodian in five of the eight ETH ETF applications.”

Outlining Coinbase’s “top priorities” for this year, Armstrong said: “Our first priority will be to drive revenue, especially growing our two largest revenue streams, trading fees and stablecoins … Our second priority is going to be to keep driving utility in crypto … Lastly, we’ll continue to drive regulatory clarity for the industry.”

Addressing concerns about cannibalization, Armstrong described: “For anybody worried about cannibalization, ETFs have been positive for the industry, which has been additive for Coinbase.” He opined:

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.

“The financial system is officially adopting crypto. This is really good, and Coinbase is the most trusted partner here,” Armstrong added. Reiterating that so far he has not seen any cannibalization, the executive stressed: “We’re seeing elevated engagement and net inflows on both retail and institutional Q1 to date. So in my view, the ETFs are just a totally positive thing.” The Coinbase CEO further shared:

And the more institutions that kind of get their feet wet with crypto, whether it’s through an ETF or any other way, the better because they’re eventually going to be using it in other ways — holding it on their balance sheet, paying their vendors, doing payroll.

“We want crypto to power more and more of global GDP. We’ve got to get this happening through every opportunity we can. So ETFs are incredibly positive, I think, for our business,” Armstrong concluded.

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