As tensions between the US and Iran continue to cause volatility in the leading cryptocurrency Bitcoin, Coinbase CEO Brian Armstrong has made new statements.
In new assessments made from account X, Coinbase CEO Brian Armstrong stated that the key factor determining Bitcoin’s long-term price is not mining activity or network energy consumption, but investors’ expectations regarding inflation.
At this point, the Coinbase CEO argued that the $BTC price was driven by inflation fears, not mining, saying the price moved in parallel with inflation concerns.
Armstrong, drawing attention to how the Bitcoin network works, stated that the hash power used for mining does not directly determine the price of $BTC.
He stated that the hash power or energy allocated to mining does not determine the price of $BTC, and that even if miners leave the market, the network difficulty is adjusted to maintain block production at the same rate.
Armstrong argued that, in the long term, the $BTC price is an indicator of how concerned people are about inflation, noting that inflation concerns are unlikely to disappear in the short term, especially given the continued budget deficits in democratic countries, which could support long-term demand for Bitcoin.
Armstrong’s remarks come at a time when debates about energy use in the technology and crypto world are resurfacing. Previously, former Facebook executive Chamath Palihapitiya had argued that with the expansion of AI investments, energy used for Bitcoin mining was shifting towards AI. According to Palihapitiya, energy and computing capacity are now becoming strategic resources in which the two sectors compete.
In contrast, Armstrong emphasizes that Bitcoin’s price dynamics are determined more by macroeconomic developments and inflation expectations than by the amount of energy used in mining.
*This is not investment advice.