Brian Armstrong: Coinbase is still ‘undervalued and misunderstood’ as Wall Street splits over crypto
Coinbase CEO Brian Armstrong insists that the market still doesn’t fully grasp what the exchange has become, arguing that traditional Wall Street models and incentives are blinding many analysts to the scale of the shift underway in digital assets.
In a recent post on X, written after an analyst Q&A session, Armstrong said Coinbase is often “misunderstood or under-appreciated” by the very institutions whose clients are increasingly demanding crypto exposure. To him, the disconnect is less about company performance and more about the structural challenge legacy finance faces when evaluating a technology that could ultimately compete with it.
According to Armstrong, the firm is living through a textbook version of the “innovator’s dilemma” – the dynamic where entrenched players struggle to adapt to disruptive technologies that threaten their existing revenue streams. He drew comparisons between crypto’s impact on finance and the way Uber redefined transport, Airbnb reshaped hospitality and SpaceX rewired the space industry.
Armstrong highlighted that many large financial institutions are no longer on the sidelines. He cited internal data showing that five of the world’s largest globally systemic banks have begun working with Coinbase in some capacity. Overall, he said, roughly half of major financial institutions are moving toward crypto adoption as regulation becomes clearer and internal resistance eases.
The other half, in his view, remains stuck. Armstrong suggested that these slower-moving firms see digital assets less as an opportunity and more as an existential threat to fee structures, settlement rails and intermediary roles that have been lucrative for decades. That tension, he argued, helps explain why coverage of Coinbase can swing from enthusiastic to dismissive, depending on who is doing the analysis and what their incentives are.
From a business standpoint, Armstrong insists Coinbase is in its strongest position since launch. Over the past three years, he said, the exchange has deliberately diversified its revenue away from pure retail trading and toward a broader mix of institutional services, subscription offerings and stablecoin-related income. That shift, he claimed, has made the company less dependent on bull-market trading frenzies and better positioned to endure downturns.
He also sought to clarify how recent earnings have been interpreted. Under GAAP accounting, Coinbase must mark its crypto holdings to market, meaning paper gains and losses on digital assets can swing net income dramatically from quarter to quarter. Armstrong pointed investors instead to adjusted net income figures, which strip out those unrealized movements. On that basis, he argued, Coinbase remained profitable in the most recent quarter even though overall market conditions were far from euphoric.
Not everyone is persuaded. Armstrong’s remarks triggered a wave of blunt criticism on X, where some users argued that if Coinbase is so undervalued, the CEO’s own behavior sends the opposite message. One outspoken critic pointed to Armstrong’s continued sale of company shares, claiming that consistent insider selling undermines the notion that the stock is a long-term buy.
The same critic went further, accusing Coinbase of misaligned priorities on user protection and product focus. They argued the company had, at times, rolled out or emphasized features that did little to enhance customer security while failing to fully commit to areas they see as strategically crucial, such as Ethereum’s broader ecosystem.
A particular flashpoint was Coinbase’s handling of Base, the Ethereum layer-2 network it incubated. The critic took issue with the decision to sell Base sequencer fees that accumulate in ETH rather than retaining or staking them, framing that move as a sign that Coinbase lacks deep conviction in Ethereum and is too focused on short-term monetization.
Another user cut right to the point, questioning why Armstrong himself was not aggressively buying Coinbase stock if he truly believed the market was mispricing the company. For skeptics, that contrast between rhetoric and personal capital allocation remains a central sticking point.
Against that backdrop, the company’s latest quarterly and full-year figures tell a different story. Coinbase reported that total trading volume surged 156% year-over-year, indicating a sharp recovery in activity even without a full-throttle speculative mania. The firm also said its market share in crypto trading doubled in 2025, signaling that it is capturing flows even as competition from both centralized exchanges and decentralized platforms intensifies.
Armstrong added that assets custodied on Coinbase have tripled in the last three years, underscoring the company’s role as an infrastructure provider, not just a trading venue. He noted that Coinbase now counts 12 separate products each generating more than $100 million in annualized revenue – a signal, in his view, that the platform has evolved into a multi-line business rather than a single-exchange story.
Stablecoin activity and subscription products have become standout contributors. Balances of USDC associated with Coinbase have climbed to fresh record highs, while Coinbase One, the firm’s subscription offering that bundles lower fees and additional features, has also reached an all-time high in sign-ups. Those lines are central to Armstrong’s argument that Coinbase is building recurring, less cyclical income streams.
Ultimately, Armstrong framed the current moment as an opportunity for investors who can think beyond conventional sector classifications. In his words, generating outperformance requires being “early and right,” and he believes that many traditional analysts are still applying outdated mental models to a company that sits at the intersection of finance, technology and infrastructure.
He contends that as the global financial system undergoes a structural shift – toward tokenized assets, real-time settlement and programmable money – platforms that already operate at scale in crypto will be best positioned to benefit. Whether Wall Street’s valuation frameworks catch up to that thesis, he suggested, is a question of time, not direction.
The rift between bulls and skeptics around Coinbase reflects a deeper divide over crypto itself. Supporters see digital assets as the next foundational layer of finance, one that can reduce friction, lower costs, and open participation to a broader set of users and institutions. Critics, by contrast, still view much of the sector as speculative, overhyped or vulnerable to regulatory whiplash. Coinbase, sitting dead center in that conflict, becomes a proxy for the broader debate.
A key challenge for the company will be maintaining credibility with both sides. Institutional clients demand robust compliance, strong security and predictable governance. At the same time, core crypto users often favor openness, resistance to censorship and minimal gatekeeping. Coinbase’s attempts to straddle those worlds – from listing decisions to staking services to custody – are consistently scrutinized and sometimes attacked from both directions.
Regulation looms large over all of this. For traditional financial analysts, shifting rules are one of the main reasons to discount or hesitate on Coinbase, given the uncertainty around what is allowed in areas like staking, stablecoins, derivatives and token listings. Armstrong’s repeated claim that “regulatory clarity is improving” is not universally shared, but it is central to his argument that more institutions are now comfortable engaging with Coinbase and the broader crypto stack.
There is also a generational and cultural component. Many of the decision-makers in major banks and asset managers came up in a world defined by centralized infrastructure and closed networks. Crypto challenges those assumptions by proposing open protocols and publicly verifiable ledgers. For analysts steeped in traditional banking, the idea that value can move globally in minutes, without correspondent banks and with transparent on-chain settlement, requires a mental reset that not everyone is ready to make.
From an investment perspective, Coinbase’s story increasingly resembles that of a high-beta, leveraged play on the institutionalization of crypto. When markets are hot and interest surges, trading and related revenues can spike. During quieter periods, the durability of recurring income, custody relationships and infrastructure services becomes the main test. Armstrong’s emphasis on diversification is effectively a pitch that Coinbase is becoming less of a pure-cycle asset and more of a long-term picks-and-shovels provider.
Yet the criticism around insider sales and strategic choices will not disappear simply because the top line is growing. For many investors, leadership behavior is a signal as important as any metric. If Armstrong wants to convince skeptics that Coinbase is truly undervalued and not just a beneficiary of cyclical hype, the way he manages his own equity, product roadmap and communication strategy will all play a part.
What is clear is that Coinbase has evolved far beyond its origins as a simple retail on-ramp. It operates custody for institutions, supports a growing ecosystem of products, develops blockchain infrastructure and partners with blue-chip financial firms that once viewed crypto purely as a rival. Whether that transformation is fully recognized in its market valuation is exactly the disagreement Armstrong is now trying to surface.
As digital assets edge further into the mainstream, the tug-of-war between legacy finance and crypto-native platforms will intensify. In that contest, Coinbase stands as both beneficiary and target – praised as a bridge into the next financial era by some, and dismissed as overhyped by others. Armstrong’s message to the latter group is straightforward: by the time the shift looks obvious in traditional models, the real upside may already be gone.