Coinbase CEO Brian Armstrong is more than $2 billion richer after post-election stock pop
Brian Armstrong, co-founder and chief executive officer of Coinbase Inc., speaks during the Singapore Fintech Festival, in Singapore, on Friday, Nov. 4, 2022.
Bryan van der Beek | Bloomberg | Getty Images
Election Day proved hugely successful for the crypto industry. Nobody was a bigger winner than Coinbase CEO Brian Armstrong.
Coinbase shares soared 31% on Wednesday, their best day on record, as investors celebrated the company’s victorious efforts to get pro-crypto candidates into office. Fairshake, the Coinbase-backed PAC, says that of the 58 candidates it supported, 46 won, with the remaining contests 12 still undecided.
Armstrong, who co-founded Coinbase in 2012 and took it public in 2021, remains the crypto exchange’s biggest investor, with ownership of well over 10% of the company’s outstanding shares. As of the latest proxy filing, he owned 34.8 million Class A and Class B shares, a stake that jumped by about $2.1 billion in value on Wednesday to almost $9 billion.
“Being anti-crypto is simply bad politics,” Armstrong wrote in a post on X, after Ohio Republican Bernie Moreno was declared the winner in his state’s Senate race over incumbent Democrat Sherrod Brown.
In a lengthier follow-up post on Wednesday, Armstrong said “no matter how you slice it, this election was huge win for crypto.”
Bitcoin jumped over 9.5%, reaching a record of over $76,400.
A Coinbase spokesperson declined to comment further.
Some $40 million of crypto money was directed at defeating Brown, the chairman of the Senate Banking Committee. One PAC paid for five ads designed to boost awareness of Moreno, a blockchain entrepreneur with very little name recognition entering the race.
The Stand With Crypto Alliance, which Coinbase launched last year, gave Brown an “F” grade, while it issued Moreno an “A.”
Moreno flipped the seat, winning 50.3% of votes cast to 46.3% for Moreno, according to NBC News. His win helped ensure a majority for the Republicans in Senate, alongside Republican nominee Donald Trump’s victory in the presidential contest.
“I am so grateful to Ohioans for their resounding support in this race,” Moreno said in a statement Tuesday night. “I look forward to working with the new Republican Senate majority to fix our economy, secure our border, and return to American strength at home and abroad.”
Moreno’s statement made no mention of crypto, despite the fact that the industry bankrolled his campaign.
Politics pays off
For Armstrong, politics has become a big part of the job as his company fights for a friendlier Washington and more amenable regulatory environment.
Securities and Exchange Commission Chair Gary Gensler sued Coinbase last year over claims that it sells unregistered securities. A judge has since ruled that the case should be heard by a jury. Coinbase has fought back vociferously, and has also said that it wants to work with regulators to come up with a proper set of laws governing the nascent industry.
Republican nominee for U.S. Senate Bernie Moreno addresses supporters at Brecksville Community Center on November 4, 2024 in Brecksville, Ohio.
Stephen Maturen | Getty Images
Armstrong told CNBC in September that his visits to the nation’s capital used to take place once or twice a year. Then it got to be at least a quarterly occasion. And the pace has only increased.
“In the beginning, a lot of people didn’t know what crypto was,” Armstrong said of his earlier trips. Now, “the discussion has advanced, really, to, how do we pass clear rules, create legislation in the United States?”
In the 2024 election cycle, Coinbase was one of the top corporate donors, giving more than $75 million to Fairshake and its affiliate PACs, including a fresh pledge of $25 million to support the pro-crypto super PAC in the 2026 midterms. Armstrong personally contributed more than $1.3 million to a mix of candidates up and down the ballot.
Coinbase stayed out of the presidential contest and focused its finances exclusively on congressional races, in an effort to assemble a group of lawmakers with favorable views of the industry.
Coinbase’s big post-election pop more than makes up for the 15% drop in the stock last week after the company reported disappointing quarterly results due to lower transaction revenue and a drop in subscriptions services revenue.
Paul Grewal, Coinbase’s chief legal officer, attended multiple fundraisers for Trump in the months before the election. As the results were rolling in Tuesday, Grewal said in a post on X that he hopes the SEC “understands what has happened tonight.”
“Stop suing crypto,” Grewal wrote. “Start talking to crypto. Initiate rulemaking now. There’s no reason to wait.”
Armstrong reposted the Grewal’s comments, adding one word of his own: “True.”
WATCH: Next congress will be ‘most pro-crypto congress’ ever
Technology
British regulators will soon announce competition remedies for the multibillion-pound cloud industry
Ofcom said it received evidence showing Microsoft makes it less attractive for customers to run its Office productivity apps on cloud infrastructure other than Microsoft Azure.
Igor Golovniov | Sopa Images | Lightrocket via Getty Images
LONDON — Britain’s competition regulator is preparing remedies aimed at solving competition issues in the multibillion-pound cloud computing industry.
The Competition and Markets Authority is set to unveil its provisional decision detailing “behavioral” remedies addressing anti-competitive practices in the sector following a months-long investigation into the market, two sources familiar with the matter told CNBC.
The sources, who preferred to remain anonymous given the investigation’s sensitive nature, said that the cloud market remedies could be announced within the next two weeks. The regulator previously set itself a deadline of November to December 2024 to publish its provisional decision.
A CMA spokesperson declined to comment on the timing of its provisional decision when asked by CNBC.
Cloud infrastructure services is a market that’s dominated by U.S. technology giants Amazon and Microsoft. Amazon is the largest player in the market, offering cloud services via its Amazon Web Services (AWS) arm. Microsoft is the second-largest provider, selling cloud products under its Microsoft Azure unit.
The CMA probe traces its history back to 2022, when U.K. telecoms regulator Ofcom kicked off a market study examining the dominance of cloud giants Amazon, Microsoft and Google. Ofcom subsequently referred its cloud review to the CMA to address competition issues in the market.
Why is the CMA concerned?
Among the key issues the CMA is expected to address with recommended behavioral remedies, are so-called “egress” fees charging companies for transferring data from one cloud to another, licensing fees viewed as unfair, volume discounts, and interoperability issues that make it harder to switch vendor.
According to one of the sources, there’s a chance Google may be excluded from the scope of the competition remedies given it is smaller in size compared to market leaders AWS and Microsoft Azure.
Amazon and Microsoft declined to comment on this story when contacted by CNBC. Google did not immediately return a request for comment.
What could the remedies look like?
The CMA has said previously in June that it was more minded toward considering behavioral remedies to resolve its concerns as opposed to “structural” remedies, such as ordering divestments or operational separations.
The watchdog said in a working paper in June that it was “at an early stage” of considering potential remedies.
Solutions floated at the time included imposing price controls restricting the level of egress fees, lowering technical barriers to switching cloud providers, and banning agreements encouraging firms to commit more spend in return for discounts.
One contentious measure the regulator said it was considering was requiring Microsoft to apply the same pricing for its productivity software products regardless of which cloud they’re hosted on — a move that would have a significant impact on Microsoft’s pricing structures.
CMA Chief Executive Sarah Cardell is set to hold a speech on Thursday at Chatham House, a U.K. policy institute. In an interview with the Financial Times, she defended the regulator’s track record on competition enforcement amid criticisms from Prime Minister Keir Starmer that the agency was holding back growth.
She is expected to outline plans for a review in 2025 into whether the CMA should more frequently use behavioral remedies when approving deals, the FT reported.
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Bitcoin breached the $95,000 level for the first time Wednesday evening as investors continued pricing in a second Donald Trump presidency.
The price of the flagship cryptocurrency was last higher by more than 3% at $97,646.68, according to Coin Metrics. Earlier, it rose as high as $97,788.00.
Shares of MicroStrategy, a bitcoin proxy, gained 3% in extended trading. Mining stocks rose as well, with Mara Holdings up 4%.
Bitcoin continues its march toward $100,000
Bitcoin has been regularly hitting fresh records this month on hopes that Trump will usher in a golden age of crypto, which would include more supportive regulation for the industry and a potential national strategic bitcoin reserve or stockpile.
It is widely expected to reach $100,000 this year and double by the end of 2025.
“Bitcoin’s price continues to be driven by a number of factors including improved liquidity conditions, increased institutional adoption, and a regulatory environment that has flipped from a headwind to a tailwind,” said Sam Callahan, an analyst at Swan Bitcoin.
Another Trump term also implies larger budget deficits, potentially more inflation and changes to the international role of the dollar – all things that would have a positive impact on the price of bitcoin.
Bitcoin has gained more than 127% in 2024.
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