Brian Armstrong Says He Was Wrong About BTC

In a recent interview, Brian Armstrong – the CEO of popular digital currency exchange Coinbase – commented that he “overestimated” bitcoin as a hedge against inflation, and he’s learning now – like so many other traders – that bitcoin is not yet ready or mature enough to handle the hard-hitting economic factors that the country has been facing over the last year and a half.

Brian Armstrong Says He was Incorrect About Crypto

In a podcast discussion, Armstrong commented:

Frankly, I’ll admit, I overestimated the chances that bitcoin would be this inflation hedge in this macro environment. I thought it might draw more attention to bitcoin in this kind of environment, but it looks like we’re a little too early.

Armstrong continued with:

Typically, in down macro environments, we see there’s a flight to safety. In the traditional economy, that was always gold, commodities, things like that, but I think what we’ve realized in this downturn is that the crypto economy is just not a significant enough percentage of the global economy, the broader economy yet, to be actually treated as that digital gold in the sense that people do a flight to safety towards bitcoin.

The idea of bitcoin being a hedge fund of sorts has always been popular, though it truly came to fruition a little over two years ago when the COVID-19 outbreak began. During this time, the economy began to suffer greatly. Many traditional assets, such as stocks, started to experience hardcore dips in their prices, and to be fair, so did bitcoin and several other digital assets.

The difference was that cryptocurrencies came back quicker and showed more resilience during that time. This was because the U.S. dollar and many other fiat currencies were suffering due to money printing becoming so common as the result of ongoing stimulus measures. When fiat currency is weak, cryptocurrencies like bitcoin often show strength, and the time of the coronavirus was no exception.

Thus, many people started to believe bitcoin was the ultimate asset and could potentially protect holders against harsh economic conditions, though that idea has been seriously challenged this year, and it looks like BTC is failing the test.

Will The Asset Return?

Despite the bearish conditions of the space, many analysts remain hopeful about the future. Matt Senter – chief technology officer at bitcoin rewards firm Lolli – said in a statement:

Bitcoin’s steadiness and ability to maintain upward momentum amid volatile market conditions are arguably more of a boon for the leading cryptocurrency than would-be drastic price movements. Bitcoin’s stability suggests its future widespread use as a secure, anti-inflationary global currency, particularly compared to the weak performance of many fiat currencies plagued by inflation. Moreover, in uncertain market conditions, investors are looking to store their wealth in relatively stable, secure investments like bitcoin is showing itself to be.

Tags: bitcoin, brian armstrong, coinbase