FTX CEO Sam Bankman-Fried says the end of the crypto-winter is just around the corner
The return of crypto-winter, a term describing the periodic downturns that hit the crypto industry, makes everyone uncomfortable. The most common question retail traders and fintech giants have is, “When will it end?” If FTX CEO and multibillionaire Sam Bankman-Fried is right, winter is probably over, and spring is just around the corner.
FTX founder Sam Bankman-Fried shares his vision for the future of cryptocurrency
“I think we’ve already seen the worst of it; there’s a little more to come, but it’s not too bad,” said Bankman-Fried, better known as SBF.
“I think some Bitcoin miners are going to have some problems, but I think we’re talking about a few $100 million dollars of total pain, not billions,” he added.
But the 30-year-old businessman added an important caveat to his rosy prediction: the cryptocurrency winter is coming to an end, but only if the economy cannot withstand further major external shocks, which brought down stock and cryptocurrency prices in the first place.
“If the Nasdaq is left to fall another 25 percent, and if interest rates do go up to 7 percent, and if we’re in a recession for two and a half years – in this world, I think Bitcoin could fall to $15K or $10K. Then there could be a new round of decline because of that,” he noted.
The recent crypto-winter has caused the aggregate market capitalization of the crypto market, which was once $3 trillion, to temporarily fall below $1 trillion. The drop in prices has caused Bitcoin, which makes up 41% of the crypto market, to hit a low not seen since the pandemic broke out in December 2020. The world’s most popular cryptocurrency is around $22,900, down about 50 percent from the beginning of the year.
The cryptocurrency downturn also instantly froze a number of once-thriving cryptocurrency companies such as Three Arrows Capital, Terraform Labs and Voyager Digital.
But FTX weathered the storm, and in fact, SBF said the downturn “was a healthy weeding out” for the industry.
“I think people had to rethink how they valued assets, and they had to be a little more grounded and understand that unreasonable thinking only works in periods of euphoria,” he said.
As FTX did better during the economic downturn, Bankman-Fried began spending money that turned him into either a white knight figure or a modern-day robber baron, depending on his point of view.
This year, FTX bought stakes in stock exchange IEX Group Inc. and stock trading platform Robinhood. In the crypto space, FTX provided millions in liquidity to cryptocurrency lender BlockFi with an option to buy it, and last month offered to buy all of the digital assets of bankrupt crypto platform Voyager and most of its loans in a joint offering with two other SBF-led companies.