Looking at the ongoing crypto market downturn and heavy liquidation problems, there are chances FTX CEO’s hunch comes out to be true.
Amidst the ongoing market crash, where many crypto exchanges and other firms seem to be going through tough times, FTX has been seen doing quite the opposite and relaxed. Bahamian crypto exchange reportedly is seen to provide loans and avail liquidations to many crypto firms who got on the verge of going insolvent. During such tough times, CEO of FTX, Sam Bankman Fried shared his gut feeling about crypto exchanges in bad times.
FTX has been bailing out several crypto-asset platforms in the challenging situation of the ongoing crypto market downturn, but not all of them will make it through, says CEO Sam Bankman Fried. SBF told Forbes that there are high chances to see more crypto exchanges losing liquidity and end up failing. He said that several third tier crypto exchanges are already going through insolvency, however neither told about any of them in detail nor took anyone’s name.
Given the ripple effect created in the crypto market due to the crash of Terra network’s algorithmic stablecoin, UST and failure of a major crypto hedge fund in the crypto space, Three Arrows Capital, several others started crippling. Such an example came out in the form of Voyager Digital and crypto lending platform BlockFi, to whom FTX has provided about $750 million worth of financial support.
Forbes thinks of it as a good deed that comes around kind of action where it’s crucial for other exchanges and firms to survive as the success of FTX depends upon the healthy crypto market. It also noted that these bailouts from Sam Bankman Fried could also be a ‘buy the dip’ attempt along with helping the entire industries to survive. However, FTX CEO said that even though crypto exchanges are there to help and act as a safety net, there are still many companies and firms who are past saving.
SBF said that there are many companies in the space who have gone too far that now it’s impractical to safeguard them from issues like significant losses in their balance sheet, issues with regulations or even there is not much left in such businesses to save.
It’s not only the economic downturn this year, but it has also come as a major crash where even the top cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have struggled a lot. This became so much worse that it pushed back the global crypto market cap even below $1 trillion.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.