Coinbase CEO Brian Armstrong discussed the company’s Q4 2022 earnings call on 21 February 2023, highlighting three key themes in his opening remarks.
According to the transcript provided by The Motley Fool, firstly, he discussed how the company had reduced its operational expenditure (“opex”) to “operate more efficiently and better generate EBITDA in the future.” This includes reducing headcount by an additional 20% in January 2023 and adjusting compensation policies to manage dilution better. Armstrong believes these changes will ensure a healthier balance sheet and allow Coinbase to continue investing in the future to become the global leader in the crypto space.
Secondly, Armstrong talked about the recurrent regulatory environment, explaining that increased regulatory scrutiny is ultimately good for the crypto space and that legitimate companies like Coinbase, which prioritize trust and compliance, will be beneficiaries. Coinbase has proactively put in place appropriate controls and is well-positioned to manage the changing regulatory landscape.
Lastly, Armstrong addressed the state of the crypto cycle, emphasizing that the market tends to flip every two years between irrational exuberance and despair. Coinbase is focused on the fundamental indicators, separating the signal from the noise, and sees an opportunity in the despair phase. Armstrong notes that the number of software developers working in crypto has doubled since 2020, and many major brands have started integrating Web3 and NFT technology into their products, which will require customers to use a crypto wallet. Coinbase is positioned to benefit as a result.
Armstrong believes Coinbase can play a big role in achieving its goal of getting crypto to one billion people globally, thereby increasing economic freedom. He believes scalability and usability are key areas where Coinbase can make an impact, making crypto easier to use and more intuitive. Armstrong also believes Coinbase has a role in the regulatory environment around education, advocacy, and policy.
Armstrong also addressed Coinbase’s work with lawmakers to shape U.S. crypto regulation, highlighting that policy is his top priority for this year. He has been spending a lot of time in D.C. and believes there is a lot of bipartisan support for comprehensive crypto legislation. Coinbase is working with various trade groups, donating to key crypto advocates, and has a detailed petition sent to the SEC requesting more clarity on regulation.