Brian Armstrong speaking at Consensus 2019 (photo by Leo Jakobson for Modern Consensus).
Bitcoin

Put crypto to work, says Coinbase’s Brian Armstrong in Consensus 2019 panel with Union Square Ventures’ Fred Wilson

Coinbase Pro now has $1 billion under management according to Armstrong

It’s time for cryptocurrency investors to stop hoarding and start putting their digital assets to work. That was one message Coinbase CEO Brian Armstrong offered attendees at Coindesk’s Consensus 2019 conference in New York on May 15.

Asked to look ahead to the next six months, Armstrong said, “we need to grow the crypto economy, we need to drive adoption around the world.”

The way to do that, he said in a discussion with Union Square Ventures partner Fred Wilson and the Wall Street Journal’s Paul Vigna, is for people storing cryptocurrency investments to start putting it to use.

“We need more verbs in the crypto economy,” Armstrong said. He argued that “buy” and “sell” need to be joined by words like “loan,” invest,” and “spend.”

In the discussion, Armstrong revealed that its year-old Coinbase Custody storage service aimed at large institutional investors has $1 billion in assets under management, and that the majority of its Coinbase Pro trading platform volume comes from institutional investors.

Wilson added that expecting those institutional investors to include top mainstream companies like BlackRock and Goldman Sachs is unrealistic. It will be at least a year or two before they enter the market, he said.

Coinbase CEO Brian Armstrong and Union Square Ventures's Fred Wilson speaking to the Wall Street Journal's Paul Vigna at Coindesk’s Consensus 2019 conference in New York on May 15 (photo by Leo Jakobson for Modern Consensus).
Coinbase CEO Brian Armstrong and Union Square Ventures’s Fred Wilson speaking to the Wall Street Journal’s Paul Vigna at Coindesk’s Consensus 2019 conference in New York on May 15 (photo by Leo Jakobson for Modern Consensus).

Around the world, there are about 200 token funds with sizable assets under management, he said, adding that “the other type of institutional investor is me.” Noting that Union Square Ventures has backed a number of companies that have issued cryptocurrency, Wilson pointed out that his firm therefore holds a lot of coins and tokens.

On the day in which leading cryptocurrency exchange Binance reopened after a $40 million hack, Wilson also touched on cryptocurrency security, noting that “a lot of mistakes were made by people who thought they were safe and were not.”

Just because you’re trading on a platform does not mean you have to store your digital assets there, he said, adding that a lot of care should be taken in choosing a custodian. Which doesn’t mean you can’t trade on smaller exchanges, he added.

“You might choose to use a small Asian exchange because it has [a coin you want to invest in], but you would not store there,” Wilson advised.

Leo Jakobson, Modern Consensus senior editor, is a New York-based journalist who has traveled the world writing about meeting and incentive travel, as well as the consumer and employee loyalty business. He also covered the East Coast side of the Internet boom and bust, small businesses, and New York City crime, nightlife, and politics. Disclosure: Jakobson owns no cryptocurrencies.

Subscribe to MODERN CONSENSUS Newsletter