America’s largest cryptocurrency exchange reported net revenue of $1.8 billion last week, but many people were more interested in the CEO’s off-the-cuff remarks at the end of the earnings call than the company’s financial performance.
Why is Coinbase’s CEO interfering with prediction markets?
What started as a light-hearted troll quickly turned into a full-blown indictment of prediction markets, at least for some people. Polymarket, which claims to be the world’s largest prediction market, called it “the devil’s work,” but the comment seemed like a joke. Jeff Dorman, chief investment officer at crypto asset management firm Arca, characterized this as “bullshit.”
(Coinbase CEO Brian Armstrong “spontaneously” mentioned all the words the market was expecting during Coinbase’s Q3 earnings call on Thursday.)
Polymarket, Dorman and others were referring to strange comments Coinbase CEO Brian Armstrong made Thursday afternoon at the end of the company’s third-quarter earnings call, after learning that investors were betting money on what words would be said during the event.
“I got a little distracted because I was following the prediction market of what Coinbase would say on its next earnings call,” Armstrong said. “And I would like to add the words Bitcoin, Ethereum, Blockchain, Staking, Web3 here just to make sure you understand before the call ends.”
The irony caught people by surprise, with some calling Armstrong a “legend” and others accusing him of tampering with prediction markets. But why the fuss? The answer depends on whether Armstrong’s antics should be considered playful or actual market manipulation.
Polymarket shows that the prediction market titled “What will Coinbase say on its next earnings call?” has a nominal volume of $3,914. However, Bloomberg and TechCrunch reported that “$84,000 was bet on whether certain words would be uttered on a cryptocurrency company phone call.” In any case, even if there was money at stake, it turned out to be relatively unimportant, so from that perspective Armstrong’s statement leans in a more playful direction. But others, including Dorman, still see the act as evidence that prediction markets can be easily tampered with, regardless of monetary value.
“I’m tired of dumping into the crown base,” Dorman wrote to X. “But if you think it’s cute or clever or shrewd that the CEO of the biggest company in the industry openly manipulated the market, you need to examine your own head.”
Armstrong took it all in stride, describing the joke as “fun” and something that “happened spontaneously.” So far, there doesn’t seem to be any major reputational damage, with many even appreciating the 42-year-old CEO’s despicable actions. “This is great, it’s giving back to people,” says Markel Martin, founder of 3point0 Labs.
Frequently asked questions ⚡
- What did Coinbase CEO Brian Armstrong do?
He jokingly mentioned cryptocurrency buzzwords at the end of the earnings call to influence live polymarket bets tracking Coinbase language. - How big of a market did he influence?
According to the report, about $84,000 was bet on whether certain words such as “Bitcoin” and “Web3” would be uttered. - Why are people upset about it?
Critics say this proves how easily prediction markets can be manipulated and undermine their credibility. - How did Armstrong react?
While he dismissed it as spontaneous fun, others in the cryptocurrency industry praised the stunt as harmless fun.