Coinbase mining at a loss makes it more difficult for other miners to turn a profit?

The profits for miners = the security budget. The chain will work fine regardless, it's just less secure.

I think the idea is that if big institutional holders like Coinbase subsidize mining at a loss, the for-profit miners become less necessary. To be clear, I'm not defending this theory, it's just the most reasonable theory I've heard.

As it happens, mining is currently also subsidized by a bunch of retail investors flocking into the publicly traded miners, given that most of them are currently losing money per coin on a unit basis once hardware depreciation is factored in.

> I think the idea is that if big institutional holders like Coinbase subsidize mining at a loss, the for-profit miners become less necessary.

I suppose it's one possible future, but I'd be shocked to hear a bitcoiner say it, since it would effectively turn a decentralised chain into a chain run by a consortium of large financial companies.

I agree, but the other path I've heard proposed is for miners to force a hard fork to lift supply cap and keep subsidizing the network with inflation. I think that's even less true to bitcoin's original ethos.

(I also think it overestimates the power that miners have to unilaterally hard fork and have the community accept it, but so goes)

You're probably right on both counts. Having said that, if the analysis is correct, then it means that users will eventually drive the chain to a place where it's experiencing regular attack. At that point they'll probably not stay around and will look for other options.

Yes, that's essentially the conclusion I've come to as well.