Crypto Needs 5-10x Growth to Become an Inflation Hedge: Coinbase CEO

In the latest interview, Coinbase CEO Brian Armstrong shared his view on the broader market amid a months-long dump and the trajectory ahead of the company. He also commented on Ray Dalio’s “The Changing World Order” theory, saying, if crypto adoption continues to rise, a new world order may revolve around a decentralized West competing with a centralized East.

Crypto as a Hedge

Comparing the current bear market to the previous ones, Coinbase CEO Brian Armstrong said in his latest interview that it had shown vastly different characteristics this time. Mainly, crypto now has many more use cases than it did in prior cycles. Moreover, this time there was no blow-off top occurring to tokens’ prices, meaning that 85% down from ATHs may not occur to the major cryptocurrencies.

He attributed the change in cycle condition partly to the macroeconomic environment that had exacerbated the crypto dump as investors tended to view the asset as similar to risky tech stocks.

Separately, he believes the total market cap of cryptocurrency probably needs to increase 5 – 10x to make the asset class a hedge against inflation – a view commonly advocated by some crypto experts.

A Super App Wallet

During the bear market, the CEO noted that his company would focus on innovation and developing new products. In particular, the exchange is working on an upgraded decentralized wallet that not only offers the functionality of conducting transactions but also includes a set of features such as personal identity, a profile page, and reputation scores.

On top of being a financial product, the wallet could be a social platform with interfaces like social feeds and status, as well as a platform for artists and musicians to demonstrate their works. In his view, the all-encompassing aspects of the super-app-like wallet encapsulate why Web 3 is the next generation of the Internet.

A Decentralized West Vs. A Centralized East

Renowned hedge fund manager Ray Dalio famously touted that the world’s current order – as dominated by America – is likely to change with the rising challenges derived from developing countries such as China.

Admitting that the US is in decline – a view in common with Dalio’s – while China is on the rise, Armstrong said the world’s new order may not be “country-centric.”

With Bitcoin rising as a candidate for the new global gold standard, Armstrong argued that a decentralized monetary system positioning BTC as the world’s reserve currency could re-boost the western hemisphere. He added that if the West does not make a move, China could make Yuan replace the dollar one day.

“Crypto represents a really compelling alternative for the West and the Western values to basically embrace the decentralization as the new world order because, otherwise, the Chinese Yuan may become the new reserve currency of the world…And so it may be actually beneficial to have a decentralized West to compete with a centralized East.”