Worst of Crypto Crisis Has Passed: FTX CEO – Decrypt
Sam Bankman-Fried sees the light at the end of the tunnel.
Despite the still stormy crypto winter, which has driven Three Arrows Capital and Voyager Digital into bankruptcy filings and left Celsius and BlockFi facing liquidity challenges—the FTX CEO believes the worst of the liquidity crunch has passed, according to Reuters on Wednesday.
Meanwhile, Bankman-Fried said his cryptocurrency exchange still has “a few billion” that could be deployed to stabilize other crypto companies experiencing financial hardship.
Other crypto firms have reached out, he said, adding that some of the smaller exchanges could still fail and be at risk for bankruptcy. But didn’t name names.
Bailouts and financial assistance are important for the health and longevity of the industry as a whole, the crypto billionaire says.
Shockwaves from just one project’s failure can ripple across the market—as the Terra Luna crash affected Three Arrows Capital, whose subsequent bankruptcy then affected Voyager Digital. In the face of economic uncertainty, Bankman-Fried doesn’t want the public to lose hope.
“Having trust with consumers that things will work as advertised is incredibly important, and if broken, is incredibly hard to get back,” he said.
As for where the market is going in the near term, Bankman-Fried believes that crypto prices are near or at bottom, but broader economic factors will continue to affect the industry.
"I don't think it's an existential threat to the industry," he said. "But I do think it is a fair bit worse that I would have anticipated."