Coinbase CEO: BTC needs to grow 10 times to become inflation hedge

Brian Armstrong, Coinbase CEO, gave an interview to the show Around the Block. The executive spoke about the current moment of cryptocurrencies and also about the future launches of the exchange.

On the show, Armstrong also commented on Ray Dalio’s “world order” theory, which talks about the global adoption of cryptocurrencies. In the executive’s view, BTC (BTC) and cryptocurrencies still need to grow at least tenfold before global adoption takes place.

In his theory, Dalio points to a struggle between the West and the East for the global adoption of cryptocurrencies. The first would adopt a more centralized posture, while the second would move towards decentralization. According to Armstrong, the theory fails because it focuses only on countries.

Coinbase CEO about inflation hedge

Comparing the current bear market with previous ones, Armstrong said the current momentum has very different characteristics this time around. In this sense, cryptocurrencies are much more used today than in 2017-2018.

In addition, the entry of large investors gave more solidity to the market. So much so that, according to Armstrong, this time there was no bubble top on BTC or Ether (ETH). the price has indeed dropped a lot, but the market indicators show no signs of a bubble.

Therefore, the bubble signals present in the bull market in 2017. Without these signals, it is likely that there will not be a correction to the 85% levels, as occurred that year. Based on this theory, BTC has likely already reached the bottom of the current cycle.

In Armstrong’s view, the market is on a downward trend because of macroeconomic factors. The CEO shares the idea that cryptocurrencies are still seen as a risky investment.

Soon, the higher risk aversion and drop in tech stocks also affected cryptocurrencies. This shows that, at least in the view of part of the market, BTC is a risky asset. In other words, cryptocurrency is still not compared to gold or other protective assets, for example.

Armstrong agrees with this view, and goes further. In the interview, the executive said that the total value of the cryptocurrency market probably needs to increase five to ten times to become an asset class against inflation.

Cryptocurrency super app

During the bear market, several companies announced staff cuts and even reduced investments. But Coinbase intends to continue to improve its services and create new features for its customers.

In this regard, the CEO revealed that the exchange is working on developing a new wallet.

In addition to being decentralized, the tool will have a number of new functionality: transactions, features like personal identity, a profile page, and reputation scores.

In practice, Coinbase intends to create a superapp system, an application that brings together several features in the same place. Superapps bring together banks, cards, shopping and payment services in a single application

In addition to being a financial product, the wallet will be a social platform with interfaces such as feeds and social statuses. The goal is to take advantage of Web3’s features and create a complete service for customers to use their cryptocurrencies.

Centralization vs Decentralization

The concept of a superapp seems common, but it is something quite new in the West. On the other hand, countries like China already have even more advanced superapps. Some, like WeChat, allow users to chat with friends, shop, and send money all in one place.

According to the theory of hedge fund manager Ray Dalio, technological advancement will determine the change in the current order of the world. Once dominated by the United States, the new order will have China as the engine of development.

This, according to Dalio, has to do with changing models. According to the manager, China has adopted a more decentralized model with fewer barriers to innovation.

In contrast, the US and the West create more and more regulations that hold back innovation, undermining the competitiveness of countries.

For Dalio, the US is in decline while China is on the rise. Armstrong agrees with that view, but said the new world order may not be “country-centric”. Instead, he argues that this order will have BTC at its center.

In Armstrong’s view, cryptocurrency is a prime candidate to be the new global standard, a role that has already been occupied by gold. If the world implements it as it is today, decentralized, the West will have a real revolution with BTC as the world’s reserve currency.

“Cryptocurrencies represent a really compelling alternative to the West and Western values. We should basically embrace decentralization as the new world order, because otherwise the Chinese yuan could become the world’s new reserve currency. So it can be really beneficial to have a decentralized west to compete with a centralized east. ”