- Brian Armstrong, CEO of Coinbase, spoke specific words during the company’s Q3 earnings call to influence a prediction market tracking those terms.
- The words included “Bitcoin,” “Ethereum,” “blockchain,” “staking,” and “Web3,” which Armstrong deliberately said to affect the market outcomes.
- The stunt was spontaneous and prompted mixed reactions, with some praising it as clever, while others criticized it as market manipulation or insider trading.
- Coinbase affirmed strict internal controls preventing employees from participating in prediction markets related to the company and emphasized its commitment to integrity.
- Ethereum founder Vitalik Buterin defended Armstrong, suggesting he intended the act as fun rather than manipulation.
The CEO of Coinbase, Brian Armstrong, spontaneously uttered a set of predetermined words during the company’s Q3 earnings call on Thursday. This occurred after he noticed prediction markets where users wagered on whether certain words would be mentioned.
Armstrong said, “I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call. I just want to add, here the words ‘Bitcoin,’ ‘Ethereum,’ ‘blockchain,’ ‘staking,’ and ‘Web3’ to make sure we get those in before the end of the call.” His inclusion of these words triggered nearly 100% odds on markets hosted by Kalshi and Polymarket, allowing users who predicted those words to win their bets.
The mention markets are a type of prediction market where participants wager on which words will be spoken during specified events. The stunt reportedly originated from a user sharing a market link with Armstrong. While some praised the move online, describing Armstrong as a “chad” or “legend,” others condemned it as an abuse of insider knowledge or a failure of the prediction market system.
Arca’s Chief Investment Officer Jeff Dorman criticized the stunt as market manipulation by the CEO of a major firm. Responding to the controversy, a Coinbase spokesperson told Decrypt, “Brian’s closing remarks were made in a lighthearted, offhand way, referencing online discussion around the earnings call. Coinbase has robust policies and internal controls that prohibit employees, including executives, from participating in prediction markets or any related activity involving the company. Coinbase is committed to the highest standards of integrity, transparency, and compliance.”
Vitalik Buterin, founder of Ethereum, voiced support for Armstrong on social media, stating, “I think Brian thought he was having fun, and I want to be part of a fun-loving society.” The stunt, however, did not impact significant financial gains as the markets involved had relatively low liquidity—Polymarket and Kalshi reported total trading volumes of about $4,000 and $80,000, respectively.
Terms such as “Web3” and “staking” garnered combined volumes under $450 on Polymarket. Despite the modest financial impact, both Polymarket and Kalshi have recently seen an increase in activity and investor interest, with new funding rounds valuing the companies each in the billions. Meanwhile, Coinbase beat earnings estimates for Q3 with increased revenues, and its stock finished the day up nearly 5% at $343.78.
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