Coinbase co-founder’s funds are really good at trading Coinbase stock

Funds tied to Coinbase co-founder Fred Ehrsam have made the most of the COIN rollercoaster

article-image

Coinbase co-founder Fred Ehrsam | "Fred Ehrsam"/Internet Education Foundation (CC license) modified by Blockworks

share

Coinbase stock is on a tear. 

Its share price has nearly quadrupled this year, and funds revolving around one particular insider have played the market almost perfectly. Along the way, trusts and funds linked to Coinbase and Paradigm co-founder Fred Ehrsam have so far sold the top, bought the bottom and even taken profits.

Ehrsam initially disclosed ownership of 17.7 million shares leading up to Coinbase’s direct listing in April 2021, split across five entities.

Ehrsam, through a trust in his name, initially sold a little more than 1.4 million Coinbase shares in the months following the company’s direct listing.

The trust netted $472 million with those trades, averaged out to $328.86 per share. COIN would go on to fall 90% from there, briefly sinking below $32 at the start of 2023.

Last week, the trust sold another 81,530 shares for $106.94 a pop, raking in $8.7 million. Forbes puts Ehrsam’s personal fortune at $1.8 billion. 

Coinbase stock sits at about $128 today. What was an $8 billion crypto company in January is now worth more than $30 billion, trailing Spotify but slightly ahead of vaccine-maker Moderna.

Diamonds are buys, circles are sales

Meanwhile, Paradigm has been buying (as has board member and Shopify CEO Tobias Lutke).

Paradigm One LP, of which 35-year-old Ehrsam was a managing partner until he stepped back last month, scooped up more than 1.2 million Coinbase shares across trades made in May 2022 and May 2023. 

That’s nearly the same amount of shares that Ehrsam’s trust sold following Coinbase’s direct listing. Paradigm One paid under $77 million for the haul, buying at $62.73 per share on average. 

Those shares are currently worth almost $157 million, paper gains of more than 100%. The fund hasn’t yet sold any Coinbase stock, per OpenInsider which compiles US Securities and Exchange Commission filings. 

Brian Armstrong has sold 2% of his Coinbase stake

It’s worth stressing that the buying and selling has been split between Paradigm One and Ehrsam’s trust — technically separate entities sold the top, bought the bottom and took profits. 

(Most of Ehrsam’s transactions were in line with trading plans lodged with the SEC ahead of time.)

But overall per his disclosures, Ehrsam entities now own a little more than 17.4 million Coinbase shares — almost 99% of his share count before offloading nearly half-a-billion dollars in stock after Coinbase went public. And he has a cool $400 million to boot.

All this while his Coinbase co-founder Brian Armstrong has been busy fulfilling his pledge to sell 2% of his COIN stake to fund other ventures, including decentralized science startup ResearchHub — which helps pay researchers in cryptocurrency to do science — and life extension play NewLimit.

Loading Tweet..

As of last week, Armstrong has sold nearly 794,000 Coinbase shares since his initial tweet — more than 2% of his COIN stake disclosed to the SEC in 2021. 

Armstrong pulled in $53.7 million with those trades, which averaged out to $67.58 per share. Had he sold the full batch today, Armstrong could’ve made as much as $101 million.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit