Crypto billionaires’ fortunes destroyed in weeks

“I’m probably the only guy in the world who has both a Bitcoin tattoo and a Luna tattoo,” Novogratz said at the Bitcoin 2022 conference in Miami on April 6.

The crypto fortunes of billionaires that have ballooned over the past two years are vanishing after a sell-off that began with tech stocks that turned into digital currency. Bitcoin, the most popular cryptocurrency, and ether have both fallen more than 50% since their all-time highs late last year.

While nearly all crypto holders have suffered a decline in wealth, some of the largest and most visible losses are concentrated among exchange founders, where traders buy and sell digital currencies.

The fortunes of Coinbase co-founder and CEO Brian Armstrong are dwindling. Bloomberg

At least on paper, Changpeng Zhao, the CEO of Binance, lost an even bigger fortune than Mr. Armstrong or Mr. Novogratz. He debuted on the Bloomberg Wealth Index in January with a net worth of $96 billion, one of the largest in the world. By Wednesday, that amount had fallen to $11.6 billion, using the average enterprise value versus sales multiples of Coinbase and Canadian crypto firm Voyager Digital as the basis for the calculation.

Crypto exchanges in the United States appear to be suffering more from a downturn than their global competitors. Trading volumes on Coinbase have steadily declined since the start of the year, while the more international Binance saw a slight increase in volume last month. Binance’s US-focused business, by comparison, saw even steeper declines than Coinbase’s.

Tyler and Cameron Winklevoss, co-founders of rival crypto exchange Gemini, have each lost around $2.2 billion – or about 40% – of their wealth this year. The fortune of Sam Bankman-Fried, CEO of crypto exchange FTX, has halved since late March to around $11.3 billion.

Mr. Armstrong is not the only Coinbase billionaire losing money. Co-founder Fred Ehrsam, a former Goldman Sachs Group trader, is currently worth $1.1 billion, down more than 60% this year.

Mr. Armstrong owns 16% of Coinbase and controls 59.5% of its voting shares, according to the company’s 2022 proxy statement, while Mr. Ehrsam has a 4.5% stake and controls 26% of its voting shares.

Coinbase bonds have also plunged, recently trading in line with some of the riskiest ratings.

Bloomberg

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