Retail investors on Coinbase continued buying dips through market volatility, even as warnings of a severe crypto winter emerged.
Since reaching a record high last October, Bitcoin has shed nearly half its value. As it continues to struggle below $70,000, the weakness is fueling fears of another crypto winter.
But despite the ongoing volatility in the market, retail activity on Coinbase has remained steady, according to Brian Armstrong.
In a recent tweet, the Coinbase chief executive said that the platform data shows retail users have continued buying despite price dips as native unit holdings across Bitcoin and Ethereum increased. Armstrong added that a majority of retail customers held balances in February that were equal to or higher than their December levels, as participation from smaller investors on Coinbase remained steady.
While retail activity appears resilient, market commentator Mippo warned that the broader market outlook remains fragile. Mippo said current conditions point to the onset of a “full-on crypto winter,” which has the potential to match the severity of the 2022 bear market or even the downturn seen in 2019. He attributed the near-term pressure to the “air gap” created by previously unsustainable valuations alongside an evolving regulatory environment.
He stated that historical crypto valuations were largely driven by speculative capital flows rather than business fundamentals, as regulatory uncertainty made it difficult for projects to generate compliant revenue or cash flows. Prices were often set by how much capital chased a limited supply of tokens tied to the most popular narratives at the time, and higher-risk themes commanded higher valuations.
According to Mippo, this framework is now breaking down as regulatory pathways for crypto projects become clearer, beginning with stablecoins and expected to extend to a broader range of tokens.
While he characterized this regulatory change as positive over the long term, Mippo said it creates challenges for projects whose valuations were built primarily on speculation. As compliant revenue generation becomes possible, he explained that market participants are increasingly focused on cash flows, which has led to a reassessment of token prices that were set too high under earlier assumptions. This helps explain why on-chain activity and fundamental usage may be growing even as token prices continue to decline, he added.
Mippo also said crypto is being “absolutely mogged by AI,” while adding that the frenzy around meme coin speculation is catching up with the industry, and that crypto failed to build useful products during that period.
As such, he estimated the reset in valuations could continue for another nine to eighteen months before broader market conditions begin to improve.
