The crypto winter has just begun, and cryptocurrency exchanges are out of cash, says billionaire and founder of crypto exchange FTX Sam Bankman-Fried.
There are “some third-tier exchanges that are already secretly insolvent,” Bankman-Fried told Forbes. The 30-year-old’s own fortune has seen a dramatic plunge in 2022 as cryptocurrencies continue to receive blows. Still, Bankman-Fried still has $8.1 billion, according to Bloomberg.
Bitcoin, the largest cryptocurrency by market capitalization, lost 58% of its value in the second quarter of the year, pace. The digital coin plunged below $19,000 on Thursday, from an all-time high of nearly $69,000. The total market value of cryptocurrencies sits below $1 trillion, down from its November 2021 peak of more than $3 trillion.
Bankman-Fried’s FTX (crypto exchange) has been seen as a lender of last resort in the crypto space — meaning that it has given loans to exchanges near collapse — and on Thursday CNBC reported that it is close to a deal to buy crypto lender BlockFi for roughly $25 million. However, Bankman-Fried said there are more crypto firms that will likely go under.