Brian Armstrong owns 16% of Coinbase and controls 59.5% of its voting shares.
It had been several weeks since the crypto crowd had been partying in Miami.
The founder of Coinbase Global Inc. Brian Armstrong had a personal fortune of $ 13.7 billion in November alone and about $ 8 billion at the end of March. That’s now just $ 2.2 billion, according to the Bloomberg Billionaires Index, after the sale of digital currencies from bitcoin to ether caused a sharp drop in the market value of Coinbase, the largest cryptocurrency exchange in the United States.
Shares of the company fell 84% since its first trading day in April 2021, closing at $ 53.72 on Wednesday after the company warned that trading volume and monthly transaction users were expected to be lower in the second quarter than in the first.
This raised questions about Coinbase’s ability to withstand the sharp decline in cryptocurrency prices, forcing Armstrong to turn to Twitter to protect the company. There is no “risk of bankruptcy” even against the backdrop of the Black Swan event, and consumer funds are safe, said Armstrong, the company’s chief executive.
Then there is Michael Novogratz. The chief executive of cryptocurrency bank Galaxy Digital saw his fortune fall to $ 2.5 billion from $ 8.5 billion in early November. He was the champion of TerraUSD, the algorithmically stable coin that is now at risk of complete collapse amid a collapse in the price of a crypto token in the same ecosystem, Luna.
“I’m probably the only person in the world who has both a bitcoin tattoo and a moon tattoo,” Novogratz told the Bitcoin 2022 conference in Miami on April 6.
I am officially a lunatic !!! Thanks @stablekwon And thanks to my friends from Smith Street Tattoos. pic.twitter.com/2wfc00loDs
– Mike Novogratz (@novogratz) January 5, 2022
The crypto-fortunes of billionaires that have swelled over the past two years are disappearing after a sell-off that began with technology stocks converted into digital money. Bitcoin, the most popular cryptocurrency, and ether fell by more than 50% from their record highs late last year.
While almost all cryptocurrency holders have experienced a decline in wealth, some of the biggest and most visible losses are concentrated among the founders of exchanges where traders buy and sell digital currencies.
At least on paper, Changpen Zhao, the chief executive of nearby Binance, has lost even more fortune than Armstrong or Novograz. It debuted in the Bloomberg Wealth Index in January with a net worth of $ 96 billion, one of the largest in the world. By Wednesday, it had shrunk to $ 11.6 billion, using the average value of Coinbase’s multiple sales company and Canadian crypto company Voyager Digital as the basis for the calculations.
US cryptocurrencies appear to be suffering more than their global competitors. Coinbase’s trading volumes have been steadily declining since the beginning of the year, while the more internationally focused Binance grew last month. By comparison, Binance’s US-focused business has declined even more sharply than Coinbase’s.
Tyler and Cameron Winklevoss, co-founders of rival cryptocurrency exchange Gemini, have each lost about $ 2.2 billion – or about 40 percent – of their wealth this year. The fortune of Sam Bankman-Fried, chief executive of the FTX cryptocurrency exchange, has halved since the end of March to about $ 11.3 billion.
Armstrong is not the only Coinbase billionaire to lose money. Co-founder Fred Ersam, a former trader at Goldman Sachs Group Inc., is currently worth $ 1.1 billion, down more than 60 percent this year.
Armstrong owns 16% of Coinbase and controls 59.5% of its voting shares, according to the company’s proxy statement for 2022, while Ehrsam has a 4.5% stake and controls 26% of its voting shares.
Coinbase bonds also declined, trading recently on some of the most risky banknote-rated banknotes.
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