Coinbase Global Inc. (NASDAQ:COIN) CEO Brian Armstrong spoke out on the validity of prediction markets, saying you “100% want” insiders betting if optimizing for truth.

The Viral Misquote That Sparked Armstrong’s Response

An X user claimed Armstrong said insider trading is “100% necessary” for prediction markets and attributed a quote to him: “If you want truth about the world, insiders are the only path.”

The user, operating under the handle @itslirrato, posted a clip of Armstrong discussing prediction markets with a U.S. government official and framed it as an endorsement of insider trading.

Armstrong fired back, saying the “100% necessary” characterization misrepresents his nuanced position and that he never said insiders are the “only path” to truth.

What Armstrong Actually Said

Armstrong’s actual comments draw a clear distinction between prediction markets as trading venues versus truth-discovery mechanisms.

He said if you’re optimizing prediction markets as an asset class and want to preserve market integrity, you shouldn’t have insider trading. 

But if you’re optimizing for a source of news and what will really happen in the world, you “100% want insider trading” because that’s where you get real signal.

Armstrong used the Suez Canal as an example. 

If there’s a market on whether the canal will be safe to open in July, a Navy Admiral on a ship who knows where the Houthis are positioned represents the real source of truth. 

He said you “kind of want that person betting on that market.”

The X User Doubled Down

After Armstrong’s correction, the X user acknowledged the exact phrasing issue but defended the interpretation, pointing to Armstrong’s actual quote at the 52:30 mark: “If you’re actually optimizing it for a source of news… you 100% want insider trading.”

The user also cited Armstrong saying “you kind of want that person betting on that market because that’s where the real source of truth is going to come from.”

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