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Why Coinbase CEO Is Not Shaken By 7% Ethereum Price Drop

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Bitcoin and Ethereum Price Performance

Ethereum (ETH) has fallen 6.6% in the last 24 hours, trading around $1,947, as broader crypto markets continue to navigate volatility and macroeconomic headwinds.

Yet amidst the price turbulence, Coinbase CEO Brian Armstrong is pointing to a surprising source of optimism: retail investor resilience.

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Retail “Diamond Hands” Hold Strong Despite Ethereum’s 7% Drop

Armstrong highlighted that, beyond weathering the market downturn, Coinbase’s retail users are actively buying the dip, resulting in net increases in BTC and ETH holdings.

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“Retail users on Coinbase have been very resilient during these market conditions, according to our data,” Armstrong wrote. “They’ve been buying the dip.

According to the Coinbase executive, they have seen a native unit increase for retail users across BTC and ETH on the exchange.

Citing diamond hands, Armstrong says most of Coinbase’s customers had native unit balances in February equal to or greater than their balances in December.

The Coinbase CEO framed this trend as a bullish counter-narrative to the current market gloom. While Bitcoin has pulled back toward the $68,000–$69,000 range and Ethereum has seen a 7% drop to levels below $2,000, retail investors are demonstrating conviction rather than panic.

Bitcoin and Ethereum Price Performance
Bitcoin and Ethereum Price Performance. Source: TradingView

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The “diamond hands” phenomenon, where users maintain or increase their crypto holdings despite drawdowns, suggests a maturing retail base that may help stabilize prices and underpin long-term adoption.

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Mixed Views Emerge as Retail Conviction Faces Market Risks

However, not everyone shares Armstrong’s optimism. Some critics argue that holding through sharp declines merely reflects significant drawdowns rather than true resilience.

Beyond holding behavior, community members are also voicing broader policy and market access concerns.

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“Retail users deserve access to yield on stablecoins and the reversal of the accredited investor law,” commented Wendy O.

This suggests that expanded DeFi participation and yield opportunities could further strengthen retail confidence.

The context is important, coming days after Coinbase’s Q4 2025 earnings revealed declining trading volumes amid an 11% drop in broader crypto market capitalization.

Yet the exchange continued to see inflows of native units from retail users, hinting at a floor of accumulation that may cushion the market during bearish stretches.

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Historical crypto cycles show that periods of sustained retail conviction often precede rebounds, as retail holders absorb volatility while institutional participants adopt more cautious postures.

Investor Decision Quality Between 2002 and 2025
Investor Decision Quality Between 2002 and 2025. Source: Doctor Profit on X

Therefore, while Armstrong’s message reassures the crypto community and subtly defends Coinbase’s performance amid a turbulent quarter, it also shows that the retail market is changing from short-term speculation to longer-term accumulation.

While prices may remain choppy in the near term, these patterns suggest that retail investors are increasingly acting as stabilizing forces in the market, potentially serving as a catalyst for recovery when broader sentiment shifts.

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Crypto World

BTC climbs off of worst levels on Strait of Hormuz hopes

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'Murban crude oil' surges past $100, posing risk to bitcoin and risk assets

The Nasdaq mostly erased an early 2% loss Thursday after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.

WTI crude oil — which had surged to nearly $115 per barrel as President Trump vowed to continue the war against Iran — fell about $5 on the news.

Crypto prices trimmed losses alongside, but remained sharply lower over the past 24 hours. Bitcoin at $66,700 is down by 3%, and ether (ETH) at $2,060 is down by the same amount.

Iranian officials framed the move as a matter of coordination rather than control. The country’s deputy foreign minister for legal and international affairs, Kazem Gharibabadi, said that even under normal conditions, ship traffic through the strait should be monitored and coordinated with coastal states like Iran and Oman to ensure safety. He added that the proposed measures are not intended to restrict passage, but to “facilitate and ensure safe passage” and improve services for vessels moving through the route.

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The remarks come after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.

Bitcoin fell after Trump’s remarks and continues to trade about 2% lower over the past 24 hours, in line with crypto stocks, including Coinbase (COIN) and Robinhood (HOOD).

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Crypto World

DeFi Is Optimizing For gas, Not For Markets

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DeFi Is Optimizing For gas, Not For Markets

Opinion by: João Garcia, DevReal lead at Cartesi.

Decentralized finance presents itself as a transparent alternative to Wall Street. Yet, what it has largely reconstructed is a simplified version of finance, engineered less around market resilience than around the constraints of gas fees. That trade-off, once treated as a technical footnote, is increasingly shaping the limits of what DeFi can become.

So long as computational minimalism remains the overriding priority, financial robustness will remain secondary, and periods of market stress will continue to expose that imbalance.

When markets move faster than the virtual machine

DeFi has rebuilt the familiar architecture of finance, including exchanges, lending markets, derivatives and stablecoins. However, the way these systems function reveals how tightly they are bound by their execution environments.

Risk parameters tend to remain static, and although collateral thresholds can adjust, they typically do so slowly, through governance processes rather than automatic recalibration. Liquidation engines currently rely on fixed formulas rather than adaptive portfolio models that account for shifting volatility or correlations. What appears as a design preference is often a concession to computational limits.

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On Ethereum and similar chains, floating-point arithmetic is absent or emulated, iterative simulations are expensive, and continuously recomputing cross-asset exposure can quickly become impractical. The outcome is that financial logic is compressed into forms that are deterministic and affordable to execute, even if that compression strips away nuance.

This architecture performs adequately in stable conditions, but volatility has a way of testing its edges. During MakerDAO’s “Black Thursday” event in March 2020, vaults were liquidated at effectively zero bids, as auction mechanics struggled under collapsing prices and network congestion. 

In later downturns, protocols such as Aave and Compound leaned on mass liquidations triggered by fixed collateral ratios, rather than dynamic portfolio recalculations. When Curve’s pools were destabilized in 2023 following a smart contract exploit, the stress radiated outward into lending protocols that treated LP tokens as static collateral, compounding systemic risk.

In each instance, decentralization itself was not the breaking point. Rather, rigid financial logic operated inside an execution layer that could not continuously recompute risk as conditions deteriorated.

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Traditional markets evolved in the opposite direction. Banks and clearinghouses simulate thousands of stress scenarios, recalculating exposure as correlations shift and volatility regimes change. Margin requirements respond dynamically to market conditions, and the response is led by substantial computational infrastructure and mature numerical tooling. Public blockchains, by contrast, were not designed with that degree of iterative financial processing in mind.

The illusion of simplicity

Constraining computational complexity reduces certain attack surfaces. Simplicity at the protocol layer, however, does not dissolve complexity in the financial system. It merely pushes it elsewhere.

When risk cannot be modeled and recomputed transparently on-chain, it migrates off-chain into dashboards, analytics teams, discretionary parameter adjustments and emergency governance coordination. The blockchain may remain the settlement layer, but the adaptive intelligence that stabilizes the system increasingly operates outside it. During volatility spikes, protocols often depend on rapid human coordination to adjust parameters, while oracles and large token holders acquire disproportionate influence over outcomes.

The system retains its decentralized base, yet its capacity to respond flexibly depends on actors operating beyond deterministic execution. What appears structurally simple at the smart contract level can conceal a more complex and less transparent operational reality.

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DeFi did not converge on simplified finance because static ratios and deterministic curves were proven superior. It converged there because richer computational models were prohibitively expensive to run. As markets deepen, leverage increases, and instruments grow more interdependent, that compromise becomes harder to ignore. Fixed thresholds and blunt liquidation engines, initially safeguards, can begin to function as amplifiers of stress.

Computation as a missing primitive

The deeper constraint, more than decentralization, is execution design.

If verifiable execution environments begin to approximate general-purpose computing systems, the financial design space expands. Native floating-point assistance, iterative algorithms and access to established numerical libraries would allow models to be expressed directly rather than translated into simplified approximations. 

Related: Wall Street will eventually submit to the rules of DeFi

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This change would allow lending protocols to incorporate scenario-based stress testing instead of relying primarily on fixed collateral ratios. Margin requirements may also adjust in response to observed volatility rather than governance cadence. It could also see credit systems recompute multivariable risk scores transparently, replacing binary heuristics with more granular assessments.

The aim is not to introduce complexity for its own sake. It is to keep financial intelligence inside the protocol, where it remains visible and enforceable, rather than externalizing it into operational layers that users cannot easily audit. This underscores the broader point that the limitations confronting DeFi are largely architectural choices, not inevitabilities of decentralization.

A credibility ceiling

DeFi now stands at a structural crossroads. One direction preserves gas-optimized minimalism, keeping base-layer execution clean while allowing increasingly sophisticated financial logic to migrate off-chain. That path may maintain clarity at the smart contract level, but it constrains how far decentralized finance can responsibly scale.

The alternative is to treat computation itself as a first-class primitive and to accept more capable execution environments in exchange for systems that can adapt, recompute and stress-test transparently. If complex risk logic cannot live on-chain, DeFi will continue to project simplicity in code while relying on discretion in practice.

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Markets will not moderate their complexity to accommodate virtual machine constraints. If decentralized finance intends to operate at a meaningful scale, its computational foundations will have to evolve alongside the financial ambitions built on top of them.

Opinion by: João Garcia, DevReal lead at Cartesi.