in Exodus top 10 influencers
Brian Armstrong is the CEO and co-founder of the cryptocurrency exchange Coinbase.
Armstrong is a vocal proponent of blockchain technology and has embraced an active leadership role in the cryptocurrency community. Due to his stake in Coinbase, Armstrong is one of the wealthiest crypto entrepreneurs in the world and easily makes our Exodus top 10 most influential people in crypto series.
In the next article of the Exodus Top 10 Most Influential People in Crypto series, we’ll take an in-depth look at how Coinbase has succeeded under Armstrong’s leadership despite stiff competition and an uncertain regulatory environment.
Coinbase: From Startup to Success Story
Prior to founding Coinbase Brian Armstrong worked as a software engineer, with a focus on fraud prevention. At Airbnb, Armstrong oversaw the payment systems from the 190 countries that the company was active in. The difficulty of sending money around the world with the existing financial system was apparent, which encouraged Brian to begin coding a protocol that would allow people to buy and hold cryptocurrencies.
His idea was good enough to get a $150,000 investment from the notoriously selective Y Combinator startup accelerator, and the idea for a company was cemented. In June of 2012 Brian Armstrong, along with Fred Ehrsam, co-founded Coinbase. Shortly thereafter the company launched a service that let users buy and sell Bitcoin.
Coinbase’s user base quickly grew and in May of 2013 the company raised $5 million in a Series A funding round from Union Square Ventures. Later that year Coinbase raised a further $25 million from Union Square Ventures, Andreessen Horowitz, and Ribbit Capital.
By 2018 the company was valued at $8 billion, making it one of the most valuable startups in the United States. By the time Coinbase went public in April of 2021, via direct listing, the company’s valuation had risen to $85 billion and Brian Armstrong’s net worth was estimated at $10 billion. In less than ten years Brian Armstrong went from software engineer to CEO of one of the world’s most successful cryptocurrency companies.
Why Coinbase Matters
There is a tendency amongst large companies, especially market leaders, to give up on innovation. Complacency can easily set in when your company is on top and the ongoing success of the business seems assured. Why take risks when the money is rolling in so consistently?
The problem is that once a company stops innovating it becomes vulnerable to disruption. Brian Armstrong must be acutely aware of that dynamic since Coinbase is continually innovating and introducing new features under his leadership. The following are some of the most notable products that Coinbase has released in the last five years.
In October of 2018 Coinbase launched the USDC stablecoin in partnership with the financial services firm Circle. Amidst a backdrop of concerns about Tether’s reserves, USDC promised to be a more reliable and trustworthy stablecoin, backed 1:1 by dollar reserves.
Since its release USDC has been steadily gaining market share. Today USDC has a total market cap of $27 billion, up from just $4 billion at the start of 2021.
The Coinbase Visa Debit Card
One of crypto’s most consistent downsides is that it’s difficult to use Bitcoin or Ethereum to buy things in the real world. Coinbase’s Visa debit card is one solution to this problem. Consumers can use the card just like a regular debit card, and funds are automatically taken out of a user’s Coinbase balance.
The debit card is part of Brian Armstrong’s larger vision of making cryptocurrency accessible to everyone. In one interview, when asked why he began working in crypto in the first place, Brian replied, “I wanted the world to have a global, open financial system that drove innovation and freedom.”
Stacking the Balance Sheet with Crypto
Brian Armstrong recently announced that Coinbase would be adding more cryptocurrency to its balance sheet. According to a tweet from Armstrong, “We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings. And we'll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the cryptoeconomy matures.”
This decision is especially significant since Coinbase will hold other assets besides BTC. According to a blog post, Coinbase will be, “the first publicly traded company to hold Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform, in addition to Bitcoin, on our balance sheet.”
The Coinbase Lend Program
Unfortunately, the latest Coinbase product is proving to be more controversial than the company might have hoped. The Direct Lend Program promised to offer users 4% returns on any USDC deposited with Coinbase. However, the SEC recently interfered and is blocking the program in a way that Brian Armstrong described as, “Some really sketchy behavior.”
In fact, Brian Armstrong published an entire Twitter thread outlining his frustration with the SEC and their alleged haphazard enforcement techniques. The thread is worth reading in full since it’s rare to see such a candid disclosure from the CEO of a public company.
One of Armstrong’s key complaints is how difficult it is for a company to adhere to opaque regulations. According to Brian, Coinbase is; “committed to following the law. Sometimes the law is unclear. So if the SEC wants to publish guidance, we are also happy to follow that.”
This reflects a broader point echoed by many other companies like Ripple and Binance; the regulatory environment in the United States is unclear and subject to unpredictable enforcement. For crypto to thrive in America there needs to be clear rules for companies to follow. If the regulatory environment remains unclear, innovation is going to go overseas and America will get left behind.
Armstrong and executives from other leading companies in the crypto space, such as Square and Fidelity, started the “Crypto Council for Innovation” this year, which aims to lobby legislators and promote the benefits that cryptocurrencies can bring to economies. As more and more large companies sign up to the council, it should go some way to bridging the current knowledge gap between the crypto space and bumbling regulators.
What’s Next for Brian and Coinbase
Brian Armstrong has enjoyed an extremely successful career as an entrepreneur, so much so that Forbes recently named Armstrong as #1 on their crypto rich list. Coinbase is the largest public crypto company in the United States and its continued growth indicates that the exchange has a bright future.
As we look out towards the coming years it seems inevitable that Brian Armstrong and hundreds of others in a similar position are going to have to work with regulators to determine crypto’s place in the financial system. There will be backroom discussions, courtroom battles, hundreds of millions of dollars in legal fees and extensive lobbying on both sides.
The hope is that Brian Armstrong and other crypto supporters can steward the American cryptocurrency ecosystem through these trials. If crypto can get the innovation-friendly regulation that it needs it will open up the space to mass adoption, which is a future that we can all get excited about.
Top 10 Most Influential People in Crypto; the countdown:
10) Vinny Lingham
9) Kathleen Breitman
8) Gavin Wood
7) Elizabeth Stark
6) Andre Cronje
5) Michael Saylor
4) Brian Armstrong
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.