Coinbase co-founder Fred Ehrsam buys $75 million worth company’s shares amidst the major dip in the bear market. The price of Coinbase’s share is currently at $66, which is 80% down from its all-time high. So, it makes perfect sense to buy back shares if the co-founders believe in the company’s future. Here’s a critical thought though, we can mostly expect that Coinbase will pump in the next bull run; in that case investing directly in Bitcoin could probably get an investor better returns.
The $75 million investment in Coinbase shares
Fred purchased 706,000 shares at nearly $70 each via his venture capital firm. This first purchase was worth around $50 million. The next one was worth $25 million at an average price of $65 and got him another 385,000 shares. So, he has bought more than 1 million shares of Coinbase. This brings the total holdings of Coinbase shares by Paradigm to 3.6 million shares. On the other hand, Fred holds around 1.1 million shares.
Coinbase’s future
The exchange suffered a $430 million loss in quarter 1 of 2022. However, that didn’t dampen the belief of its CEO in the company. In fact, Brian Armstrong said that he is extremely bullish even after this loss. Brian further added that so many new customers are joining that they need to keep all hands on deck even to keep things running.
Coinbase’s CEO also believes that this kind of downturn pushes them to innovate, which benefits them in the next cycle. This is the first time the company has faced losses in a quarter but considering that crypto markets are still not mature enough and have bursts of bear phases and bull runs, it is unavoidable.
The exchange was developing its own NFT marketplace, which was introduced a few months ago. They intend to become a market leader in the sector and are well on their way. Brian did not provide stats but stated that there are several opportunities and that the NFT field is vast. However, it does not correspond to the volume visible on the platform. On the debut date, there were just 150 transactions totaling $75k.
It is difficult to say whether Coinbase’s share price will recover in the coming years. Though, I am bullish as well. What are your thoughts as Coinbase co-founder Fred Ehrsam buys $75 million worth company’s shares? And do you think buying Bitcoin would be better? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Michael Saylor sticks to his $1M price target for Bitcoin despite market volatility.
