Sam Bankman-Fried finally sees light at the end of the tunnel. Despite the stormy crypto winter that pushed Three Arrows Capital and Voyager Digital into bankruptcy and sent Celsius and BlockFi into liquidity trouble, believes the CEO of FTX that the worst is over.
FTX still has several billions up its sleeve
Despite the severe setbacks, Bankman-Fried says his exchange still has “several billions” available to stabilize other crypto companies, should the need arise. The CEO of FTX says several smaller trading platforms have contacted him and may still be at risk of going bankrupt. Naturally, he refused to name names.
It is extremely dangerous to name names in these kinds of cases. If people just get the idea that their exchange is not liquid, it can cause a “digital bank run”. “Having the confidence of users that everything works as it should is extremely important. Once that goes away, it’s incredibly difficult to get it back,” Bankman-Fried said of the plagued crypto firms.
We are at or around the bottom
When asked about his feelings about the market, Bankman-Fried indicates that he believes we are at or near the bottom. With the caveat that macroeconomic factors currently dominate the market and will continue to influence the industry. “I don’t think it’s an existential threat to the industry, but it’s a lot worse than I expected,” said the FTX CEO.
While in recent months we have mainly been concerned with the fear of extreme inflation, the fear of a recession has now also been added. That only makes the situation more difficult for the central bankers, as guardians of the economy. It remains to be seen to what extent they can raise interest rates to fight inflation without pushing the economy into recession.