DE Shaw Held Coinbase Debt, Equity as Crypto Churned
The firm, one of Wall Street’s longest running quantitative trading shops, has been dabbling in crypto equity and debt
Exclusive art by Axel Rangel modified by Blockworks
Alternative investments giant DE Shaw owned stakes in Coinbase debt and equity during a turbulent time for the cryptocurrency industry.
DE Shaw, which runs about $60 billion, held positions in the crypto exchange’s common Class A stock and Coinbase notes in the fourth quarter, according to regulatory filings.
It’s not clear whether DE Shaw has maintained, added or subtracted from its Coinbase holdings. The firm’s core liquid quant strategies may turn over positions quickly.
A spokesperson declined to comment.
DE Shaw’s Coinbase equity position was miniscule relative to the firm’s overall book. Its traders purchased 12,800 shares, which were valued at about $453,300 at the time, according to filings outlining the firm’s holdings as of year-end 2022.
The hedge fund firm’s Coinbase note holdings then were far more substantial — encompassing $64.5 million in outstanding principal value. The credit instruments were valued at roughly $37 million on the open market at the time.
Coinbase’s stock (COIN) closed Thursday’s New York trading session at $69.36, up 17.5% on the day. Brian Armstrong, the exchange’s chief executive, has been selling off some of his own holdings to fund other startups he has in the works.
Coinbase has more recently been going on the digital assets offensive in the face of the SEC’s controversial crackdown on rival Kraken’s crypto staking operations.
The New York-based DE Shaw has historically been known as a quantitative trading shop, running a variety of liquid strategies under that umbrella. It moved to raise its already lofty performance fees imposed on limited partners to as high as 40%, Bloomberg reported in October.
The firm, founded by David Shaw in 1988, now has more than 2,000 employees and is overseen by a six-person executive team.
A number of DE Shaw’s former quants have left the long time Wall Street firm to take up digital asset roles, including to launch their own crypto-focused startups.
Others who spent time at DE Shaw previously have followed suit.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- The Drop: Apps, games, memes and more.
- Lightspeed: All things Solana.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
