On May 12, 2025, Coinbase CEO Brian Armstrong made headlines by calling the idea of holding Bitcoin as a reserve asset “very dangerous.” This marked a sharp reversal from his January support for a U.S. Bitcoin strategic reserve. His shift reflects deeper concerns about Bitcoin’s volatility and regulatory uncertainty—two key risks facing companies with operational funding needs.
Armstrong revealed that Coinbase once considered allocating 80% of its balance sheet to Bitcoin but ultimately backed away, citing fears it could “destroy the company.” Even though 25% of its net cash is in crypto—mostly Bitcoin—Coinbase now plans more cautious growth in cryptoreserves. The core issue? Bitcoin’s price swings could shorten the firm’s financial runway from 18 to just 10–12 months.
This pragmatic pivot highlights a broader industry trend: while Bitcoin $BTC is gaining institutional acceptance, its extreme volatility makes it unsuitable for companies needing financial stability. Despite bullish momentum in May and a market cap nearing $2 trillion, Bitcoin’s role as a corporate reserve asset remains debatable.
Ethereum, $ETH with its smart contract functionality and DeFi integrations, is seen as a strong alternative. Yet, its purpose differs—more utility, less store-of-value. Other contenders like Ripple, Solana, and stablecoins offer niche benefits but fall short of Bitcoin’s dominance.
In short, Armstrong’s shift underscores a maturing crypto market: high potential, but not without significant risks. Companies and investors must tread carefully, balancing innovation with stability. As of now, Bitcoin remains king—but its throne is not without cracks.$BTC