As the crypto exchange giant Coinbase released its earnings report for Q1, the stock price of the company heavily plunged. However, the co-founder Fred Ehrsam took advantage of the dip to buy more than one million Coinbase (COIN) shares.
Coinbase co-founder’s heavy shopping
On May 13, Ehrsan, who is also the co-founder and managing partner of crypto investment firm Paradigm, bought more than 706,000 Coinbase shares at an average price of $70 each, which is worth around $50 million, according to a Form 4 filing with the United States Securities and Exchange Commission (SEC). In addition, the Co-founder went on to purchase another 385,000 Coinbase shares at an average price of $65 each, which is worth around $25 million.
The recent shopping increased Paradigm’s Coinbase holdings to more than 3.6 million shares. Ehrsam, who currently serves on the Coinbase’s board of directors, additionally holds 1.1 million shares through a trust.
Ehrsam and affiliated entities have been regular traders of Coinbase stock since the April 2021 IPO, selling hundreds of millions of dollars in shares.
Downfall led to the heavy purchase
Coinbase’s Q1 earnings report shows revenue of $1.165 billion, a 27% year-on-year reduction, and a 53.2% month-on-month decrease, leading to a net loss of $430 million.
Furthermore, trading volume in the first quarter of this year was $309 billion, a 44% decrease from the previous quarter. The retail trading volume was $74 billion, a 58% decrease from Q4. Weaker cryptocurrency market conditions in Q1 mainly caused the consecutive decline in Q1 compared to Q4. Institutional Trading Volume was $235 billion, a decrease of 37% from the previous quarter, and accounted for 76% of total Trading Volume.
Last week’s shopping occurred after Coinbase shares fell over 70% in 2022 and over 80% from the all-time high reached shortly after the company’s first public offering last year.