The new crypto elite rush to mine physical assets: Coinbase co-founder’s high-stakes oil field adventure in Venezuela

This is also an investment difficult to reconcile with Ehrsam’s background. He worked as a foreign exchange trader at Goldman Sachs, co-founded Coinbase with Brian Armstrong in 2012, and later co-founded the cryptocurrency investment firm Paradigm in 2018. His investment portfolio subsequently expanded to include frontier-tech companies such as OpenAI, Anthropic, and SpaceX. Why would someone who accumulated wealth through digital assets—and who has long invested in software and cutting-edge technology—venture into politically volatile Venezuela to compete for a traditional resource humanity has extracted for over a century? Perhaps the answer lies not solely in oil itself. While established oil giants hesitated, Ehrsam rushed in. Judged purely by petroleum endowment, Venezuela is impossible to ignore. Yet over the past two decades, its vast underground resources have failed to translate into commensurate production. At the end of the 1990s, Venezuela’s crude oil output reached nearly 3 million barrels per day; today, it stands at only 1.25 million barrels per day. Longstanding sanctions, insufficient investment, aging infrastructure—compounded by political and property-rights risks—have gradually turned this country, which holds one of the world’s largest proven oil reserves, into a unique anomaly within the global oil industry. Oil remains abundant underground; what is truly scarce is sustained capital inflow, well-maintained infrastructure, and the technical talent and operational capacity steadily eroded by brain drain. However, beginning in 2026, circumstances shifted. After Maduro’s arrest by U.S. authorities and Delcy Rodríguez’s appointment as interim president, U.S.–Venezuelan relations rapidly reconfigured. In the oil sector specifically, Venezuela reformed its petroleum law to allow greater private-sector participation under new production models; meanwhile, the Trump administration placed oil at the core of its Venezuela strategy—simultaneously adjusting sanctions and contractual frameworks while urging U.S. energy firms to invest approximately $10 billion locally. This transformed Venezuela’s oil industry into a market undergoing institutional repricing. A country long shunned by global capital due to years of sanctions and economic crisis, once reopened, could offer returns far exceeding those of mature markets. Ehrsam’s subsequent actions suggest he was clearly willing to bear that reopening risk. Together with Manuel Iribarren—a Stanford graduate and Venezuelan national—he co-founded Primavera earlier this year. In February, the two traveled to Venezuela to seek investment opportunities. Following meetings with Venezuelan leaders and senior executives of PDVSA, they settled most favorably on oil and natural gas—an investment category carrying high risk but one whose payoff structure is deeply familiar to venture capitalists, and precisely what most attracted Ehrsam. It is not about hunting for a 10% undervaluation in a stable, transparent market with secure property rights; rather, it is about accepting a high probability of failure in a market where few investors dare enter—so as to capture substantial asset revaluation potential following institutional change. Yet the waters promising such potentially high returns run exceptionally deep—not everyone is willing to wade in.

The country with the world’s largest proven oil reserves surrenders its petroleum resources and associated benefits—what, then, remains for this nation and its people?

Ever since Venezuela’s democratically elected president Nicolás Maduro was betrayed by his own inner circle, U.S. special forces launched a joint sea–land–air raid—capturing Maduro and his wife from their presidential residence bedroom with virtually no resistance—then swiftly transported them to New York, where U.S. federal courts filed a series of drug-trafficking charges against Maduro. President Maduro immediately denied the drug-smuggling allegations—but his rebuttal carried little weight. When one party holds all the knives and the other is mere meat on the chopping block, once Maduro and his wife fell into American hands, slapping on any convenient charge—ensuring Maduro spends the rest of his life behind bars—became effortless. And after Maduro’s imprisonment, Venezuela’s successor leader—interim president Delcy Rodríguez—swiftly reversed Maduro’s staunchly ‘anti-U.S.’ foreign policy, pivoting instead toward open cooperation with the United States. And how exactly would that cooperation manifest? Naturally, by placing Venezuela’s most valuable state-owned mineral resource—oil—on the negotiating table. Thus, just days ago, U.S. President Donald Trump triumphantly announced on social media the conclusion of what he dubbed “the largest oil deal in world history.” Under the agreement, the United States secures partial rights to Venezuela’s massive oil reserves—a pivotal step in securing access to the country’s energy resources. Viewed through Trump’s trademark ‘winning’ lens, Venezuela—with the world’s largest proven crude oil reserves—was evidently placed squarely on the menu, and Trump, along with the petro-financial capital backing him, is feasting lavishly. Trump stated the deal was negotiated by Secretary of State Marco Rubio, Secretary of Defense Pete Hegseth, and Venezuela’s interim president Rodríguez. The U.S. government and an unnamed Venezuelan private enterprise (readers may speculate freely about the ultimate and minority shareholders behind this firm) jointly established a new company, which then signed a contract granting it 100-year development rights over undeveloped Venezuelan oil fields. What does a 100-year development right entail? According to Rodríguez’s statement, the agreement covers 17 undeveloped Venezuelan oil fields holding 65 billion barrels of proven reserves—and this deal is positioned as the linchpin of Venezuela’s economic recovery, set to modernize its domestic oil industry. In a nationwide televised address Sunday evening, Rodríguez emphasized that Venezuela’s sovereignty remains intact and expressed hope that the country would become a global energy powerhouse. She specifically noted these oil reserves would no longer remain “static, cold numbers,” but would instead be converted into tangible solutions—such as housing and healthcare subsidies. Yet after delivering many lofty promises, numerous critical questions remain unanswered: When will extraction begin? Who will shoulder the enormous upfront project investments? And once development commences, will the resulting petroleum products flood existing oil markets? If OPEC perceives Venezuelan oil production increases as threatening global oil prices, might it coordinate production cuts to suppress prices? Venezuela has yet to provide answers to any of these questions. Interim President Rodríguez claims the agreement will attract $10 billion in investment from European and American oil capital—and generate over $209 billion in tax revenue for Caracas. Such projections are overly optimistic, bordering on outright deception aimed at placating the public!

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