In November, Coinbase Global Inc. founder Brian Armstrong he had a personal fortune of $13.7 billion. But the figure dropped significantly to $2.3 billion., according to the Bloomberg Billionaires Index. This comes after a sell-off in digital currencies, from bitcoin to ether, caused a sharp drop in the market value of Coinbase, which is the largest cryptocurrency exchange in the United States.
The company’s shares have plunged 78% since its initial public offering in April 2021 through Wednesday, where they fell another 24% taking the stock to a total of $54.91. This comes after the company warned that trading volume and monthly transaction users were expected to be lower in the second quarter compared to the first.
Therefore, doubts have been raised about Coinbase’s ability to withstand the sharp drop in cryptocurrency prices, this discussion forced armstrong to come out and defend his company on Twitter stating, “no risk of bankruptcy”not even in the face of a “black swan” event and that “user funds are safe”.
What is happening is that the multi-million dollar cryptocurrency fortunes that have increased in the last two years are disappearingfrom a sell-off that started with tech stocks and spread to digital money. Both bitcoin, the most popular cryptocurrency, and ether have fallen more than 50% from their all-time highs late last year.. On the other hand, terraUSD, an algorithmic stablecoin, is at risk of crashing outright. It is a far cry from what it was just a few weeks ago, when the cryptocurrency community was partying in Miami.
While nearly all cryptocurrency holders have seen their fortunes plummet, some of the largest and most visible losses, is concentrated among the founders of the stock markets where traders buy and sell digital currencies.
At least on paper, Changpeng Zhao, the CEO of Binance, has lost an even bigger fortune than Armstrong. Zhao debuted on the Bloomberg Wealth Index in January with a net worth of $96 billion, making him one of the world’s wealthiest. Now, on Wednesday, he was down to $16 billion. To calculate it, the average business value was used as a basis with respect to the sales multiples of Coinbase and the Canadian crypto company, Voyager Digital.
Cryptocurrency exchanges in the United States seem to be suffering a greater decline than their international competitors.. The trading volumes in Coinbase have fallen steadily since the beginning of the year, while Binance as a company is more focused on the international arena, it has been able to experience a spike in volume in the past month. In any case, the business Binance in the US saw an even steeper decline than Coinbase.
Also Tyler and Cameron Winklevoss, co-founders of rival cryptocurrency exchange Gemini, have each lost around $2.1 billion, approximately 40% of its assets acquired this year. In addition, Michael Novogritz, CEO of crypto merchant bank Galaxy Digital, saw his fortune plummet from $8.5 billion in early November to $2.9 billion.
Armstrong is also not the only Coinbase billionaire losing money.but the co-founder fred ersama Goldman Sachs Group Inc. explorer, currently has a net worth of $1.1 billion, down from more than 60% year-to-date. Coinbase bonds have also tumbled, recently trading in line with some of the riskier junk-rated securities.
With information from Bloomberg