Despite the fact that the move from Brian Armstrong to sell his stake to fund research is a noble one, stakeholders in both the traditional and crypto ecosystems are considering this as a vote of no confidence in the prospects of the company.
Brian Armstrong, the Chief Executive Officer (CEO) of American cryptocurrency trading platform, Coinbase Global Inc (NASDAQ: COIN) has revealed his plans to liquidate as much as 2% of his stake in the company in order to fund new startups with progressive scientific solutions.
Taking to Twitter over the weekend, Armstrong revealed that he will be selling the shares over the course of the next year. The funds generated will be going to NewLimit and ResearchHub. While NewlLimit is a startup that is working toward the radical extension of human healthspan using epigenetic reprogramming, Research Hub is accelerating the pace of science by rewarding the open sharing and discussion of academic research.
I'm passionate about accelerating science and tech to help solve some of the biggest challenges in the world. To further this, I'm planning to sell about 2% of my Coinbase holdings over the next year to fund scientific research and companies like @newlimit + @researchhub
— Brian Armstrong (@brian_armstrong) October 15, 2022
ResearchHub is based on blockchain technology and the reward is powered by its native coin, the ResearchCoin (RSC). According to Armstrong, the move does not mean he plans to leave his role as Coinbase CEO, but rather, it will afford him an opportunity to contribute beyond digital currency trading.
“I’m passionate about accelerating science and tech to help solve some of the biggest challenges in the world. To further this, I’m planning to sell about 2% of my Coinbase holdings over the next year to fund scientific research and companies like @newlimit + @researchhub,” he announced via the tweet, adding that “For the avoidance of doubt, I intend to be CEO of Coinbase for a very long time and I remain super bullish on crypto and Coinbase. I’m fully dedicated to growing our business and advancing our mission, but I am also excited to contribute in a different way.”
Coinbase stock plunged following the news of the liquidation of the potential shares by Armstrong. The bearish news dragged the firm’s stock to close Friday’s trading at $63.59, down 8.19%. Though the shares are showing signs of recovery in the Pre-Market today, overall, Coinbase has lost about 80% from its high of $342.98 attained back in July 2021.
Coinbase CEO News Not Calming Nerves
Despite the fact that the move from Brian Armstrong to sell his stake to fund research is a noble one, stakeholders in both the traditional and crypto ecosystems are considering this as a vote of no confidence in the prospects of the company and the industry it represents.
The cryptocurrency industry has faced a lot of strain lately with bankruptcies and staff cutting the order of the day. In recent times, many top executives from mainstream crypto firms have left their jobs, including Jesse Powell, the CEO of Kraken Exchange.
With the current outlook, Brian’s reassurances that he hopes to be the CEO of Coinbase for a much longer term might have calmed some stakeholder’s nerves, but in reality, it is bound to serve as a tipping point for others to cautiously place the firm on their watchlist.
As far as his valuations are concerned, the 2% share liquidation will be pegged at around $54 million per the 19% stake he owns in Coinbase according to a Forbes estimate.
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