The CEO of FTX, one of the biggest cryptocurrency exchanges in the world, claimed that the worst of the continuing cryptocurrency volatility, which sent token prices down and led to the failure of several big businesses, has likely passed.
Sam Bankman-Fried, the head of FTX, has recently emerged as cryptocurrency’s savior, providing desperately needed capital to cryptocurrency businesses that have failed as the value of cryptocurrencies has plummeted.
At the time of writing, the price of Bitcoin (BTC) is $20,535, up 2.1 percent over the previous seven days. After reaching an all-time high of $69,000 in November of last year, the cryptocurrency has lost over 70% of its value.
A Year of Disaster for Crypto
Although prices have stabilized, the decline in cryptocurrency prices may have reached its bottom. However, Bankman-Fried, a California native who now resides in the Bahamas, where FTX is based, says that this will mostly depend on the macroeconomic climate.
For crypto investors, this year has been a complete nightmare. Due to the current crypto winter, the market capitalization of these digital assets has decreased to below $1 trillion, and the values of almost all cryptocurrencies have decreased by more than 50% from their all-time highs.
The most precise definition of crypto winter is when prices fall and stay low for a long time.
FTX Boss Unconcerned about the Current Crypto Crisis
The 30-year-old crypto millionaire, a 2014 graduate of the Massachusetts Institute of Technology, was quoted by Reuters as saying, “I don’t think it’s an existential danger to the sector.” But I think it is a lot worse than I expected,” he added, alluding to the decline in Bitcoin prices.
Even Bitcoin miners have been forced to liquidate their holdings, according to Sharat Chandra, vice president of Research and Strategy at blockchain-based identity management platform EarthID.
As the U.S. Federal Reserve aggressively hiked interest rates to combat hyperinflation, investors deserted the cryptocurrency markets.
According to experts, market volatility will persist, and sell-offs cannot be completely ruled out.
Bankman-Fried, whose company has previously extended credit lines totaling hundreds of millions of dollars and has been the target of acquisition rumors, said to Reuters that his company still has “a few billion” to support other cryptocurrency businesses who are experiencing financial difficulties.
According to Bankman-Fried, financial support and bailouts are crucial for the overall health and viability of the cryptocurrency industry.
The billionaire said, “It does grow more costly with each one of them,” adding that FTX still had a sizable amount of cash on hand to close a $2 billion acquisition, if necessary.