Buterin Responds to Taleb’s Suggestion

The famous analyst said, “Get your money out of this cryptocurrency exchange…”, Ethereum founder Vitalik Buterin replied.

Nassim Nicholas Taleb, a Lebanese-American mathematical statistician and author of the book “The Black Swan,” advised investors and customers to leave Coinbase after the news that CEO Brian Armstrong had sold shares of cryptocurrency exchange Coinbase for more than $1.6 million.

Recently, news emerged showing that Armstrong sold approximately 29,732 Class A Coinbase shares worth $1,625,102 on Nov. The data was disclosed in a Coinbase filing with the US Securities and Exchange Commission (SEC). Armstrong also converted its Class B shares to Class A shares. Taleb believes this move points to the danger surrounding Bitcoin exchange Coinbase and warns people not to invest in the company.

In his tweet, Taleb said:

Take what you can out of the sinking ship. In the real world, that is, pre-crypto, a CEO never sell his or her own shares while shouting "all is OK". A CEO selling shares expresses such a loss of confidence in the company it is taken extremely seriously. pic.twitter.com/tzqnIwjd8q
— Nassim Nicholas Taleb (@nntaleb) November 17, 2022

In response, Ethereum co-founder Vitalik Buterin denied Taleb’s claims that there was trouble within Coinbase as the reason behind Armstrong’s sale. Buterin highlighted the “psychological stress” involved in having nearly all of one’s net worth in an illiquid asset:

Strongly disagree. The psychological stress of having 99% of your net worth in one single illiquid asset can easily make people go insane. There is absolutely nothing wrong with some diversification, and the sanity boost from diversifying can even improve work performance.
— vitalik.eth (@VitalikButerin) November 17, 2022