Coinbase, one of the largest cryptocurrency exchanges, just came out of a particularly rough quarter, reporting disappointing Q3 earnings and watching its stock plunge by over 10%. In an attempt to restore investor confidence, the company announced a $1 billion share buyback. However, this move failed to revive the flagging stock, with shares barely showing any signs of recovery.
The scenario unfolds a glaring insight into Coinbase’s strategic blunders, the most obvious of which is its reluctance to invest in Bitcoin, the very cryptocurrency it has helped shepherd into mainstream acceptance. Rather than initiating share buybacks, if Coinbase had invested that $1 billion into Bitcoin for its corporate reserves, the message would have been loud and clear: Coinbase not only talks the talk but walks the walk when it comes to faith in Bitcoin and the overall future of cryptocurrencies.
It’s both ironic and disheartening to see Coinbase, a pioneer in the cryptocurrency industry, hesitating to invest in Bitcoin’s potential in 2024. This is especially perplexing when one considers the success of companies like MicroStrategy, which began buying Bitcoin in 2020 and has seen their market cap surpass that of Coinbase, despite generating only a fraction of the latter’s revenue. The secret to their success? Stacking sats, or steadily accumulating Bitcoin.
Coinbase, a company established in 2012 when Bitcoin was valued at a mere $5, should be leading the charge in this regard. The potential gains from an early and consistent investment in Bitcoin are staggering to consider. But it’s not too late for Coinbase to correct its course.
Instead of squandering resources on share buybacks and projects with dubious returns, Coinbase should be leveraging its position in the market to continue stacking sats. The path forward is clear: any Bitcoin and crypto company worth its salt should hold Bitcoin on its balance sheet. This not only aligns the interests of the company with those of its shareholders but also serves to reinforce its credibility in a market that it helped to build.
So, it’s high time for Coinbase CEO, Brian Armstrong, to wake up and smell the coffee. The company owes its very existence to Bitcoin, and it’s high time it acknowledged that fact. It’s time for Coinbase to go all in on Bitcoin, demonstrating not only its belief in the cryptocurrency’s value but also its commitment to its shareholders and the broader crypto community.
This perspective reflects the author’s viewpoints alone and may not necessarily represent the views of BTC Inc or Bitcoin Magazine. However, the need for Coinbase to align its strategies with the evolving crypto landscape remains a pressing issue that merits serious consideration.
