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Coinbase creates billionaires when valuation above US$100 billion

Coinbase listed its stock directly, allowing employees and existing shareholders to sell shares immediately at a market-based price.

Coinbase, a cryptocurrency exchange, was valued at US$99.6 billion when it began trading as a public company on the Nasdaq and soared to a valuation of more than US$100 billion in minutes. The euphoria waned and the San Francisco, California-based business, created in 2012, closed at US$328.28, which is a market capitalisation of US$85.8 billion.

Analysts, traders and economists characterised the public listing of Coinbase as a historic milestone for cryptocurrencies, with the biggest US exchange now getting exposure to mainstream stock market investors. Some have even suggested that the listing might hasten the widespread adoption of digital assets.

“This is a watershed moment for the digital asset industry, as it signifies a larger moment of credibility for a market that is maturing rapidly,” said Hunter Merghart, Head of US for rival cryptocurrency exchange Bitstamp, Coindesk reported.

Coinbase listed its stock directly, allowing employees and existing shareholders to sell shares immediately at a market-based price. In pursuing a direct listing, Coinbase followed technology businesses Spotify, Slack, Palantir and Roblox.

Coinbase is the most popular cryptocurrency exchange in the US and its value has increased principally due to the the record amount of money being spent on cryptocurrencies Bitcoin and Ethereum. Coinbase has 56 million users, up from 43 million at the end of 2020 and 32 million at the end of 2019. In its last private financing round in 2018, investors valued the company at US$8 billion.

Coinbase’s billionaires

Brian Armstrong, the CEO and Co-Founder of Coinbase, owns 20 per cent of the company’s shares, according to the SEC filing. With Coinbase hitting a market valuation of US$100 billion, that gives him a net worth of US$20 billion, which propels him easily in to the 100 richest people in the world.

Venture capital firm Andreessen Horowitz is Coinbase’s largest financial backer, and Co-Founder Marc Andreessen and Partner Kathryn Haun sit on Coinbase’s board. Andreessen is the second largest individual shareholder behind Armstrong and his Coinbase shares are worth around US$18 billion.

Hedge fund billionaire Chase Coleman’s Tiger Global Management, which led the Series E round of funding at Coinbase, has a stake now worth around US$10 billion at the US$100 billion market capitalisation.

Coinbase Co-Founder Fred Ehrsam (pictured with Armstrong) stepped down from his day-to-day role as President in 2017. He is a board member and owns around nine per cent of Coinbase stock, which gives him a net worth of US$9 billion at the US$100 billion valuation.

Coinbase’s Chief Product Officer Surojit Chatterjee, who has been at the company 15 months, has a stake was worth about US$181 million. He is also set to receive share options within the next five years that are currently worth about US$465.5 million, according to data compiled by Bloomberg.

Rapper Nas, real name Nasir Jones, founded investment firm QueensBridge Venture Partners and was part of the Series B 2013 funding round for Coinbase. A story posted on Coindesk estimated the investment firm holds between 99,329 shares at the low end or 496,642 at the high end, which means his stake is at least US$40 million, according to Forbes.

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