Back to the list

It’s a split after all, Brian: how the Coinbase CEO lost a bet of $5,000

06 August 2017 21:00, UTC

A year ago, in February 2016, the Coinbase chief executive Brian Armstrong wrote an article on the Medium.com platform. “I’ll bet you $5,000 that bitcoin’s first hard fork works out just fine” – well, as we have seen during the past week, it did not. He assumed there that in case hard fork happens, the market participants will all choose the biggest chain, that being the original Bitcoin blockchain. As we have witnessed, some market members decided to support the new Bitcoin Cash currency and it even entered the top 3 most valuable cryptocurrencies. The UAHF will not be a split, it’s going to be an upgrade – he argued in that post. Well… the emergence of Bitcoin Cash tells otherwise.

Mr. Armstrong, however, does not hesitate to describe and review his errors. Today, on 7 August 2017, he posted a chain of tweets with his remarks about what he thought back then and what actually happened. He says he did not expect the minority forks will even be valuable to anyone on the market. He further reviews his forecast and finds that the assumption that Bitcoin’s value is going to rise after hard fork has proven to be true, however, it should be noted here that many technical analysts reject the idea that market prices are influenced by big events and instead think that the current positive trend is the result of a V-shape Bitcoin has entered some time before the actual occurrence of hard fork, so this event might not be the reason of current growth.

“Anyway, good reminder to never be to (sic) sure about your thinking!” concludes Brian Armstrong in one of the tweets, demonstrating a nice sense of self-criticism and a good example of how market analysts should react to their incorrect forecasts.

“And what of the bet?” some might ask. Turns out that although nobody wished to take the CEO of Coinbase on his bet in the past, he is going to donate $5,000 to charity, mentioning this in another tweet today.