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.
I’m passionate about accelerating science and tech to help solve some of the biggest challenges in the world. To further this, I’m planning to sell about 2% of my Coinbase holdings over the next year to fund scientific research and companies like @newlimit + @researchhub
— Brian Armstrong 🛡️ (@brian_armstrong) October 15, 2022
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.
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