David Canellis

Insiders at public crypto companies are busy squaring away their final stock plays for the year, with execs at Coinbase, Marathon, Bakkt and others executing nearly $13 million in trades over the past month.



Most of those trades were sales.



Coinbase&#8217;s executives led the charge by altogether selling $10.6 million in company stock since this time last month. Brian Armstrong, Coinbase’s long-serving CEO, offloaded more than $1.32 million in shares between Nov. 21 and Dec. 12, for an average price of $44.43.



Armstrong in October <a href="https://blockworks.co/news/coinbase-ceo-to-sell-2-of-his-coin-to-fund-scientific-research" target="_blank" rel="noreferrer noopener">pledged to sell</a> 2% of his Coinbase stock to fund life extension and other scientific research. The top US crypto exchange’s shares now trade 22% below Armstrong’s most recent sale price, having recorded <a href="https://blockworks.co/news/coinbase-stock-hits-sixth-all-time-low-this-month" target="_blank" rel="noreferrer noopener">consecutive record lows</a> this month as crypto stocks continue to take a battering alongside digital asset prices.



Coinbase Chief Financial Officer Alesia Haas cashed in even more, having sold more than $9.1 million in shares for $43.70 on average — representing 86% of all Coinbase insider stock sales over the past month.



General Counsel Paul Grewal and Chief Accounting Officer Jennifer Jones each sold smaller sums, worth about $80,700 and $95,400, respectively.



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Bitcoin mining executives at Riot Blockchain and Cipher Mining also shifted stock. Riot Chief Compliance Officer Chad Everett Harris sold more than 75,500 shares for $4.15 a piece on average, bringing in $313,600.&nbsp;



Cipher CEO Tyler Page got rid of far fewer company shares worth under $29,000, per OpenInsider data compiled by Blockworks, which references SEC filings.



Institutional crypto services platform Bakkt saw its own sales: VPC Impact Acquisition Holdings, a Victory Park Capital affiliate and 10% owner, jettisoned $124,000 in stock over the past month, bringing its total Bakkt sales for the year to nearly $1.8 million.



And while not a pure-play crypto stock, discount brokerage Robinhood clocked $1.76 million in insider sales across the same period.&nbsp;



Bhatt Baiju, chief creative officer, sold the most with $861,000, followed by CEO Vlad Tenev ($780,000) and General Counsel Martin Gallagher Jr. ($122,000).



Most trades in this report were made according to pre-lodged trading plans filed with the SEC.



<h3 class="wp-block-heading">Crypto insiders have altogether bought more stock than they’ve sold</h3>



Insiders at just two public crypto companies Blockworks analyzed — Coinbase and Marathon — bought stock over the past month. Shopify CEO Tobias Lütke, who joined the Coinbase board in January, gathered an additional $1.52 million stake over the past month.&nbsp;



Lütke has bought almost $7.2 million in Coinbase stock this year, split across <a href="https://blockworks.co/news/shopify-ceo-spends-3m-on-coinbase-stock-in-2-months" target="_blank" rel="noreferrer noopener">regular weekly buys</a> worth $396,000 on average. Lütke has overall collected 115,804 shares for $61.46 on average this year.&nbsp;



Coinbase currently trades for $35.05, meaning Lütke is down 43% on his Coinbase buying strategy in 2022.



Marathon board number Kevin DeNuccio, who became a director at the leading mining firm last January, bought 70,000 company shares for $4.84 on average, representing a $339,000 trade. Marathon stock is now trading 20% below that price point.



In fact, the data shows insiders across the 12 public crypto firms analyzed have spent just under $98.2 million on their own companies’ stock over the past year — double what they’ve sold.



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Coinbase insiders have bought the most by far with $84 million, led by co-founder Fred Ehrsam with $76.8 million all by himself. 



Ehrsam sold 1.5 million Coinbase shares in the months following the firm&#8217;s direct listing last April, fetching $328.18 on average to generate $492.3 million. Coinbase stock would need to surge 800% to reclaim that price.



Execs at bitcoin mining firms Terawulf ($10.85 million), Stronghold ($1 million), and Marathon ($556,000) also bet on their own companies, while those at software intelligence unit MicroStrategy acquired $1.5 million in shares between May and June.



Struggling bitcoin miner Core Scientific saw more sales than any other stock, with co-founder and Chief Vision Officer Darin Feinstein unloading $18.3 million in company shares across late May and early June for an average price of $3.05.



Core Scientific stock has sunk 92% since Feinstein’s sales. The firm warned investors it was close to bankruptcy last month and would fail to meet debt obligations.



Updated Dec. 19, 2022 at 2:38 pm ET: Added context about Ehrsam&#8217;s trades.



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Crypto Insiders Ready for Final Stock Trades of a Brutal Year

Casey Wagner

<div id="highlights-block_622bafc8ffb37" class="highlights">
 <ul>
 <li>Coinbase doubles down on its efforts to diversify revenue streams away from trading fees</li>
 <li>Those that qualify for the beta launch will be contacted by email</li>
 </ul>
 
</div>



As Coinbase looks to distance itself from transaction-based revenue, the exchange has begun recruiting the first customers for Coinbase One, a subscription service that comes with $0 trading fees.



Perks of the <a href="https://help.coinbase.com/en/coinbase/other-topics/coinbase-one/account" target="_blank" rel="noreferrer noopener">subscription</a> also include up to $1 million in account protection and 24/7 phone support. A spokesperson from Coinbase declined to reveal the price, which will be billed monthly.



Coinbase One is currently in its beta launch, the exchange said.



The exchange has <a href="https://cms.blockworks.co/coinbase-2-23b-q2-earnings-exceeds-estimates/" target="_blank" rel="noreferrer noopener">historically</a> reported trading fees as its main source of revenue, but it has been trying for months to diversify its profit streams. In May 2021, the revamped version of Coinbase Prime, the exchange’s prime brokerage service, launched.



In January 2022, Coinbase announced that it would be buying Commodity and Futures Trading Commission-regulated derivatives exchange FairX, offering another opportunity to diversify revenue.



<div class="wp-block-image"><figure class="aligncenter"><img decoding="async" src="https://lh3.googleusercontent.com/4BnppVXT5tqNn7ai0-KxSQujN5VYnL0m8IySgWkcAkLjEtfNRgDyLT5YuWb6-pKlQGG1YjYOQU8yclvDNp0prbwuvYyjqqaBRu7I3qHtWADVLnKHC6Rz064jPbCBQcLAbEt0F_Yi" alt=""/><figcaption>Source: Coinbase</figcaption></figure></div>



“The transaction revenue has historically may have the lion&#8217;s share of our revenue,” said Alesia Haas, chief financial officer of Coinbase, during the exchange’s 2021 <a href="https://cms.blockworks.co/coinbase-expects-softer-first-quarter-after-strong-q4/" target="_blank" rel="noreferrer noopener">fourth quarter earnings</a> call. “We&#8217;re taking steps to diversify this revenue and also grow our non-transaction revenue streams.”&nbsp;



Coinbase executives also braced shareholders for a quieter first quarter of 2022 on the earnings call, saying that they are expecting lower monthly transacting users and total trading volume in the first three months of the year.



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Coinbase Rolls Out Test of Fee-free Trading

Ben Strack

<div id="highlights-block_621901f603a6f" class="highlights">
 <ul>
 <li>Company’s leadership spoke about revenue diversification, NFTs and stock price during its latest earnings call</li>
 <li>Execs don’t view OpenSea as a chief competitor as it preps NFT marketplace, noting there will be many winners in nascent space</li>
 </ul>
 
</div>



Though Coinbase reported sharp <a href="https://cms.blockworks.co/coinbase-reports-sharp-revenue-user-growth-in-q4/" target="_blank" rel="noreferrer noopener">fourth quarter revenue and user growth</a> Thursday evening, executives said they are expecting lower monthly transacting users and total trading volume in the first quarter.



Coinbase Chief Financial Officer Alesia Haas noted during the company’s earnings call Thursday that the “softer” trend seen in the first couple months of 2022 is in part driven by lower cryptoasset prices. The price of bitcoin, for example, is down nearly 20% since the end of 2021.



Monthly transacting users (MTUs) have averaged roughly 10 million, and the company has set an expected 2022 MTU range between 5 million and 15 million. MTUs hit 11.4 million during the fourth quarter.



Meanwhile, Coinbase has seen about $200 billion in trading volume quarter to date. Trading volume totaled $547 billion in the final three months of 2021, a nearly 70% quarter-over-quarter increase.



CEO Brian Armstrong said he no longer views downturns as “crypto winters,” noting the increased use cases for crypto outside of trading, such as NFTs and decentralized finance (DeFi).



“The biggest problem we have is not to think about what’s going to happen in any given quarter, but how do we actually capture the size and scale of this opportunity in front of us when there’s so many multibillion-dollar business opportunities around us,” Armstrong explained.



<h3 class="wp-block-heading">Diversifying revenue</h3>



Though transaction revenue remains the lion’s share of Coinbase’s revenue, Haas noted the company’s focus on diversifying its revenue streams in 2022.



Coinbase generated more than $500 million of subscription and services revenues last year — a tenfold increase from 2020 — including $214 million during the fourth quarter.



This segment comprised 7% of the crypto platform’s net revenue in 2021, up from 4% the year prior.



The company had 3.6 million users earning yield on their assets at the end of the year — five times 2020’s total.&nbsp;



“We plan to open up assets like ETH for institutions later this year, and we also plan to add more assets, more proof-of-stake chains for users to participate in,” Haas said.



<h3 class="wp-block-heading">Coinbase versus OpenSea?</h3>



Executives said they expect more than one winner in the nascent NFT (non-fungible token) market.



Coinbase <a href="https://cms.blockworks.co/coinbase-plans-to-launch-nft-marketplace/" target="_blank" rel="noreferrer noopener">revealed in October</a> that it would launch an NFT marketplace allowing users to purchase, mint, showcase and discover the cryptoassets.&nbsp;



Emilie Choi, Coinbase’s president and chief operating officer, noted on the call that she and others at the company are “huge fans” of OpenSea. Coinbase Ventures was an early investor in the NFT marketplace.



“We see a lot of opportunity for innovation, [and] we definitely don&#8217;t believe that this is a zero-sum game,” she added during the call.



<blockquote class="wp-block-quote">“Today, people can buy on Coinbase, transfer to a wallet and then go to the marketplace; if they can do that all in one app with a few clicks, that&#8217;s a win.”</blockquote>



Armstrong said NFTs will grow well beyond digital artwork.&nbsp;



“There are going to be a lot of winners,” the CEO said. “Oftentimes, if you put out a product and another product looks similar in the early days, they tend to diverge over time and find their own niches after at some point.”



<h3 class="wp-block-heading">What’s up with the COIN price?</h3>



Executives also addressed Coinbase’s stock price, which was about $175 at 11 am ET on Friday — down roughly 30% year to date. The company became the first publicly traded crypto exchange last April.



Inflation, interest rate concerns and geopolitical tension — such as Russia’s <a href="https://cms.blockworks.co/bitcoins-plunge-on-ukraine-invasion-undermines-status-as-digital-gold/" target="_blank" rel="noreferrer noopener">recent invasion</a> of Ukraine — have contributed to a sell-off of high-growth companies in recent months, Haas explained.



The stock, she added, is correlated with crypto prices. Bitcoin’s price, which hit an all-time high of nearly $70,000 in November, was below $40,000 on Friday morning.&nbsp;



“We honestly don&#8217;t truly understand this,” Haas said, “as this correlation does not take into account the growth in our market share…the diversification of our business beyond investing, and let alone the future potential of our business as we expand into new assets and new product streams.”



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Coinbase Expects ‘Softer’ First Quarter After Strong Q4

<div id="highlights-block_61b08d5a6c0b0" class="highlights">
 <ul>
 <li>Executives from Bitfury, Paxos, and Stellar Development Foundation will also testify at hearing of US House Committee on Financial Services</li>
 <li>Circle Co-founder Jeremy Allaire to recommend that “the US should aggressively promote the use of the dollar as the primary currency of the internet”</li>
 </ul>
 
</div>



Executives of some of the largest crypto companies in the world are set to testify before the US House Committee on Financial Services on Wednesday.



The hearing — called Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States — will feature testimony from FTX CEO Sam Bankman-Fried, Circle CEO Jeremy Allaire and Alesia Haas, the CFO of Coinbase Global.



<hr class="wp-block-separator"/>



The other crypto firm leaders set to testify include Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla and Denelle Dixon, the chief executive of Stellar Development Foundation.Though some might interpret the invitation as US legislators taking a hostile approach towards digital assets, it should rather be seen as a positive signal, said Mikkel Morch, executive director at crypto hedge fund <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__ark36.com_about-2Dus_-23our-5Fteam&amp;d=DwMF-g&amp;c=sWW_bEwW_mLyN3Kx2v57Q8e-CRbmiT9yOhqES_g_wVY&amp;r=FUTyxn_53i67ILzDMW5BFG24i77vq3UgLHm1MQBAppk&amp;m=F2xft-K7lbChauYoIcnSMDrgQHVZWAilDTCEYvi8Lnk&amp;s=4TvW1zxaA07sth7ycoEiAHuILYioqhRAnu0CpSFeqrU&amp;e=" target="_blank" rel="noreferrer noopener">ARK36</a>.



“Cryptocurrencies have been on the radar of top US politicians for a long time now, yet the Congress hasn&#8217;t yet decided to take any substantial regulatory action towards it,” Morch said.&nbsp;



<blockquote class="wp-block-quote">“One should hope the committee is a sign that US congressmen and congresswomen are willing to learn more about this burgeoning and extremely innovative market sector before taking any action that could potentially cripple it.”</blockquote>



Martha Reyes, head of research at digital asset prime brokerage and exchange <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__bequant.io_&amp;d=DwMF-g&amp;c=sWW_bEwW_mLyN3Kx2v57Q8e-CRbmiT9yOhqES_g_wVY&amp;r=FUTyxn_53i67ILzDMW5BFG24i77vq3UgLHm1MQBAppk&amp;m=F2xft-K7lbChauYoIcnSMDrgQHVZWAilDTCEYvi8Lnk&amp;s=dowhZcTdB6r7C_aqJIkkDmqvYIufW4NNrBpEaluPZDk&amp;e=" target="_blank" rel="noreferrer noopener">BEQUANT</a>, said in an email that it is key for politicians to understand the implications of any crypto-related laws they may enact. She added that the hope is that the US becomes the first major crypto-friendly economy.



Morch said he doesn’t expect the US to follow China’s approach to crypto. The People’s Bank of China (PBOC) <a href="https://cms.blockworks.co/bitcoin-breaks-below-30000-on-china-concerns/" target="_blank" rel="noreferrer noopener">told the country’s key financial institutions</a> in June to block all cryptocurrency transactions, and its regulators have intensified a ban on bitcoin in recent months.



But, Morch added, he believes there will be tighter regulation related to stablecoins, noting that it is becoming more likely that the US government will seek to “severely restrict” what entities will be able to issue stablecoins.



Circle launched its stablecoin, USD Coin (USDC), in September 2018.



“In a world where money becomes a core feature of the internet, the US should aggressively promote the use of the dollar as the primary currency of the internet, and leverage that as a source of national economic competitiveness, security and a major upgrade needed for more efficient and inclusive financial services,” Allaire, Circle’s co-founder, said in <a href="https://www.circle.com/blog/circle-ceo-to-congress-u.s.-at-pivotal-moment-on-digital-assets" target="_blank" rel="noreferrer noopener">a blog post </a>published Tuesday.&nbsp;&nbsp;



Allaire will also be speaking about the expanding use cases for stablecoins across both institutional and startup businesses, according to a Circle spokesperson, including small business payments, international low-cost, high-speed remittances and efficient payments for remote workers.



“Even though the road will be a long one, the sector is hopeful that these Congressional meetings will make a difference in the long term,” Reyes said. “While this continues, players in the industry such as ourselves must continue to act with clients&#8217; best interests at heart and aim to become recognized and regulated in other jurisdictions while the US decides how it will move forward.”



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<h3 class="wp-block-heading">Watch Replay</h3>



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