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Sam Bankman-Fried’s Prediction Regarding Destruction
A bitcoin price of $10K to $15K is likely if the Nasdaq falls by 25%, interest rates keep rising, and a two-and-a-half year recession breaks out. According to Sam Bankman-Fried, that might cause much more destruction. Some businesses were left out in the cold and exposed over this winter, but Fried’s FTX has survived the majority of it. Shock freezes at Voyager Digital, Celsius, Babel Finance, and Three Arrows Capital have led to some investors frantically trying to get their money back.
Bankman-Fried thinks that the bitcoin market crash will be contained to a very modest portion of its overall scope. The TerraUSD stablecoin, a form of cryptocurrency tied to a fiat currency by reserves or algorithmic techniques, collapsed, sparking the start of the market crash. The creator of Frax, a mostly algorithmic and partially collateral-backed stablecoin, thinks it’s unlikely that another stablecoin would fail in the current crypto winter. This is physically impossible by holding external assets as security, Sam Kazemian told the reporters.
Only Purposeful Investors Survived The Crypto Winter
According to Sam Bankman-Fried, the winter was required to weed out people who invested in cryptocurrencies without purposefully taking into account an asset’s true worth. According to him, such ungrounded thinking is only effective when the market is euphoric. Fried has reportedly invested heavily in struggling bitcoin companies in an effort to safeguard client funds and stop the negative impacts of linked lending from spreading. Furthermore, he added, FTX thought about concluding agreements that weren’t disastrous but weren’t ideal either. This FTX spending binge prompted similarities to institutions like JPMorgan Chase, which served as a lender of last resort to banks throughout the 2008 financial crisis.
As the lender struggled to satisfy liquidity needs, one of the projects that FTX and Sam considered as advantageous was BlockFi, to whom it issued a $400 million credit line. It has the option to spend $240 million to purchase the business. Fried acquired a 7.6% interest in Robinhood Markets in May after the brokerage’s stock price suffered a decline in the spring. He also provided Voyager Digital, a crypto lender, with a $200 million loan along with 15,000 bitcoins. After spending $75 million, the business declared bankruptcy in May 2022.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
