Coinbase CEO Brian Armstrong Issues Serious Warning As Bitcoin Surges Toward $25,000

Bitcoin has surged higher again, soaring to fresh new all-time highs of over $24,000 per bitcoin after beginning the week at under $19,000.

The bitcoin price, up a staggering 30% this week alone, climbed to $24,220 on the Luxembourg-based Bitstamp bitcoin and cryptocurrency exchange before falling back slightly.

However, amid this week’s huge bitcoin and cryptocurrency Santa rally—which has added over $100 billion to the value of the world’s digital tokens—Coinbase chief executive Brian Armstrong has warned over the “risk” of bitcoin and cryptocurrency investing.

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“While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk,” Armstrong wrote in a blog post this week—published just before the San Francisco-based company revealed it has filed confidentially for a long-awaited initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC).

Coinbase is jumping on the IPO bandwagon at a time when the other technology companies, such as Airbnb and DoorDash, are debuting with sky-high valuations. When Coinbase, which makes money through fees attached to customer trades, last raised funds in 2018 it was valued at $8 billion.

“Crypto can be a volatile asset class,” Armstrong added. “Often more so than the types of traditional financial instruments that most investors are used to. For example, this means that the market can move in either direction much faster than equity markets.”

The bitcoin price, after beginning the year at around $7,000, crashed to under $4,000 in March as the coronavirus pandemic caused markets to go into meltdown. It quickly rebounded to around $10,000 and began climbing towards its 2017 all-time high in October.

The bitcoin price surge has accelerated in recent months as a growing number of high-profile investors name bitcoin as a potential inflation hedge and some of Wall Streets biggest banks change their tune on the digital token asset class.

“Like all asset classes, crypto markets will rise and fall over time,” Armstrong wrote, pointing to bitcoin’s 2017 bubble that saw the bitcoin price climb from under $1,000 at the beginning of the year to around $20,000 only to crash back to $3,000 in 2018.

“We’ll occasionally see strong market rallies where prices will rise quickly and aggressively. While we’re always excited to see increased interest in crypto, it’s also important to point out that this is not only a time of high volumes, but also price volatility.”

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