Coinbase CEO Reveals Wall Street Feels Threatened by Crypto, Claims Company is Undervalued

In a revealing statement on social media platform X, Coinbase CEO Brian Armstrong has articulated a compelling perspective on the financial industry’s evolving relationship with digital assets. Armstrong contends that Wall Street institutions feel genuinely threatened by cryptocurrency’s disruptive potential, while simultaneously arguing that his own company, despite a challenging stock performance, has never been stronger. This declaration comes at a pivotal moment for the crypto industry, as regulatory frameworks begin to solidify and institutional adoption accelerates. The CEO’s analogy comparing traditional finance’s skepticism to a taxi company’s view of Uber underscores a fundamental technological shift now unfolding in global markets.

Coinbase CEO Analyzes Wall Street’s Crypto Resistance

Brian Armstrong’s commentary provides a direct window into the psychological and structural tensions between legacy finance and the emerging digital asset ecosystem. He observed that approximately half of large financial institutions are now actively engaging with cryptocurrency, a significant milestone driven by improving regulatory clarity. However, the other half continues to resist. Armstrong attributes this resistance not merely to technological unfamiliarity, but to a deeper, career-based threat. Professionals who built their expertise and status within the traditional system may perceive crypto as an existential challenge to their value proposition.

This dynamic mirrors historical patterns of technological disruption. For instance, the rise of digital photography disrupted Kodak, and streaming services transformed the music and film industries. Armstrong explicitly linked crypto’s journey to other innovations like Uber, Airbnb, and artificial intelligence, all of which faced initial skepticism from entrenched incumbents. The key difference, however, lies in crypto’s target: the very core of financial services, including payments, asset custody, and capital formation. Consequently, the resistance is arguably more intense and systemic.

The Undervaluation Thesis and Coinbase’s Strategic Position

Despite Coinbase’s stock (COIN) declining approximately 36% over the past year, Armstrong asserts the company is fundamentally undervalued. This claim rests on several concrete pillars of evidence. First, Coinbase has successfully diversified its revenue streams beyond simple retail trading fees. The company now generates significant income from:

• Institutional Services: Custody, prime brokerage, and staking for large clients.
• USDC Stablecoin: Interest income from reserves.
• Blockchain Rewards: Staking and protocol services.
• International Expansion: Derivatives trading and exchange services in regulated overseas markets.

Second, Armstrong highlights the strengthening regulatory environment. Clearer rules, even if stringent, provide a stable operating landscape that favors compliant, well-established players like Coinbase over smaller, less-regulated entities. The approval of Bitcoin ETFs in early 2024, for example, validated the asset class and funneled billions in institutional capital through regulated gateways, indirectly benefiting Coinbase’s custody and trading infrastructure.

Cryptocurrency’s Direct Disruption of Traditional Finance

Armstrong’s central argument is that cryptocurrency represents a direct, structural challenge to Wall Street’s traditional business models. This disruption operates on multiple levels. At its core, blockchain technology enables peer-to-peer value transfer and programmable money, reducing or eliminating the need for certain financial intermediaries. This threatens fee-based revenue models for clearing, settlement, and cross-border payments.

The table below contrasts traditional finance functions with their crypto-based alternatives:

Furthermore, the rise of Decentralized Finance (DeFi) protocols offers lending, borrowing, and trading services algorithmically, without a central bank or brokerage. While DeFi currently complements more than replaces traditional finance, its growth trajectory signals a potential long-term shift. Armstrong’s statement acknowledges this tension, positioning Coinbase not as a destroyer of the old system, but as a critical bridge and beneficiary of the transition.

Regulatory Clarity as a Catalyst for Institutional Adoption

A critical component of Armstrong’s optimistic outlook is the evolving regulatory landscape. For years, regulatory uncertainty was the single largest barrier to institutional capital entering the crypto space. Large asset managers, pension funds, and banks require clear rules regarding custody, compliance, accounting, and taxation. The past 18-24 months have seen meaningful progress on these fronts globally.

In the United States, despite ongoing debates, the passage of specific legislation like the FIT21 Act provided a foundational framework for digital asset markets. Regulatory agencies have also issued more detailed guidance on custody rules and securities law applicability. Internationally, jurisdictions like the European Union (with MiCA), the UK, Singapore, and the UAE have established comprehensive regulatory regimes. This global patchwork of rules, while complex, creates pathways for compliant operators. Armstrong notes this clarity is why 50% of large institutions are now “actively embracing crypto.” They finally have a rulebook to follow.

Coinbase’s Performance and Market Resilience

To support his “strongest position” claim, Armstrong can point to Coinbase’s operational and financial resilience through a volatile market cycle. The company navigated the 2022-2023 “crypto winter,” which saw the collapse of several major competitors (FTX, Celsius, Voyager), by maintaining rigorous risk management and compliance. This contrast bolstered its reputation as a trustworthy counterparty. Financially, Coinbase returned to profitability in 2024, demonstrating its ability to manage costs and monetize its diverse product suite even in lower-volume environments.

The company has also made significant technological investments. Its Layer 2 blockchain, Base, has grown into a major ecosystem for decentralized applications, generating transaction fee revenue and fostering developer loyalty. Additionally, Coinbase’s international expansion strategy has reduced its dependence on the U.S. market, insulating it from domestic regulatory shocks. These strategic moves illustrate a company building for the long-term infrastructure of the crypto economy, not just short-term trading spikes.

The Path Forward: Integration Versus Displacement

The future relationship between Wall Street and crypto may not be a zero-sum game of total displacement. A more likely scenario, which Coinbase is positioning itself to lead, is one of integration and hybridization. Traditional financial institutions are increasingly likely to:

• Offer crypto custody and trading services to clients.
• Tokenize traditional assets (bonds, funds, real estate) on blockchains.
• Utilize blockchain technology for back-office efficiency.

In this integrated future, companies like Coinbase provide the essential technology stack, compliance expertise, and market access. Armstrong’s comment about being “better suited than Coinbase to make these changes a reality” speaks to this intermediary role. The company aims to be the platform upon which both the new crypto-native economy and the adapting traditional system are built. This ambitious vision, if realized, could justify a valuation far exceeding that of a simple retail crypto broker.

Conclusion

Coinbase CEO Brian Armstrong’s recent statements provide a strategic diagnosis of the current financial landscape. He identifies a Wall Street community grappling with the disruptive threat of cryptocurrency, leading to skepticism and resistance from those vested in the old system. Simultaneously, he makes a data-backed case for Coinbase’s undervaluation, citing its diversified revenue, strengthened regulatory position, and role as a critical bridge in finance’s digital transformation. While market sentiment and stock prices may fluctuate in the short term, the underlying trends of institutional adoption, regulatory clarity, and technological innovation continue to advance. Coinbase, according to its CEO, is uniquely positioned to capitalize on these seismic shifts, suggesting the current market valuation may not fully reflect its long-term strategic potential in a world where digital and traditional assets increasingly converge.

FAQs

Q1: Why does Brian Armstrong think Wall Street feels threatened by cryptocurrency?
Armstrong believes the threat is both professional and structural. Many finance professionals built careers within the traditional system, and crypto disrupts its core functions like payments, custody, and fundraising, potentially diminishing the need for certain intermediaries.

Q2: What evidence does Armstrong give for Coinbase being in a strong position?
He points to diversified revenue streams (beyond retail trading), a strengthening regulatory environment, growing institutional adoption, and the company’s survival and growth through a severe market downturn while competitors failed.

Q3: How has regulatory clarity improved for cryptocurrency?
Globally, frameworks like the EU’s MiCA regulation and progress in the U.S. with legislation like FIT21 have provided clearer rules for custody, securities law, and operations, giving institutions the confidence to participate.

Q4: What did Armstrong mean by the “taxi company and Uber” analogy?
The analogy illustrates that incumbents in a system being disrupted are often the worst sources of objective analysis about the disruptor, as they have a vested interest in the status quo.

Q5: If Coinbase is so strong, why has its stock price fallen?
Stock prices reflect short-term market sentiment, speculation, and macroeconomic factors like interest rates. Armstrong argues the long-term fundamentals of the company and the crypto industry’s adoption curve are stronger than the current stock price indicates.