Coinbase founder Brian Armstrong’s wealth shrink to

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

Billionaire crypto fortunes that swelled over the last two years are disappearing after a sell-off that began with tech stocks spilled over into digital money. Bitcoin, the most popular cryptocurrency, and ether have both fallen more than 50 per cent since their record highs late last year.

While almost all crypto holders have suffered wealth declines, some of the biggest and most visible losses are concentrated among founders of exchanges, where traders buy and sell digital currencies.

The fortune of Coinbase co-founder and chief executive Brian Armstrong is shrinking. Bloomberg

At least on paper, Changpeng Zhao, the CEO of closely held Binance, has lost an even larger fortune than Mr Armstrong or Mr Novogratz. He debuted on the Bloomberg wealth index in January with a net worth of $US96 billion, one of the world’s largest. By Wednesday, that fell to $US11.6 billion, using the average enterprise value to sales multiples of Coinbase and Canadian crypto firm Voyager Digital as a basis for the calculations.

Crypto exchanges in the US appear to be suffering more of a downturn than their global competitors. Trading volumes at Coinbase have steadily fallen since the beginning of the year, while more internationally focused Binance saw an uptick in volume last month. Binance’s US-focused business, by comparison, experienced even steeper declines than Coinbase’s.

Tyler and Cameron Winklevoss, co-founders of rival crypto exchange Gemini, have each lost about $2.2 billion – or roughly 40 per cent – of their wealth this year. The fortune of Sam Bankman-Fried, CEO of crypto exchange FTX, has fallen by half since the end of March to about $US11.3 billion.

Mr Armstrong isn’t the only Coinbase billionaire losing money. Co-founder Fred Ehrsam, a former Goldman Sachs Group trader, is currently worth $US1.1 billion, down more than 60 per cent this year.

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

Coinbase’s bonds have also plunged, recently trading in line with some of the riskiest junk-rated notes.