Crypto billionaires, including heads of some of the largest trading platforms, have seen their fortunes wiped out in the market crash, with one losing more than $120 billion.
Cryptocurrency billionaires, including the founders and CEOs of the largest trading platforms, have seen their personal fortunes wiped out by the latest market crash.
Coinbase has lost half its value in the past week, with most of the sell-off coming even before the company reported a $430 million net loss in the first quarter amid declining users and sales.
A steep sell-off in cryptocurrencies Bitcoin to Ethereum has driven the decline, with shares in the United States’ largest exchange now falling 84 percent since they debuted in the stock market in April 2021, closing at $53.72 on Wednesday.
As of Thursday morning, many top cryptocurrencies were at their lowest levels since late 2020.
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That has seen Coinbase founder Brian Armstrong’s net worth plummet.
Mr. Armstrong had a personal fortune of $13.7 billion in November, according to the Bloomberg Billionaires Index, but that’s now just $2.2 billion — a loss of $11.5 billion.
On Twitter, Mr. Armstrong tried to reassure investors and customers that “we are not at risk of bankruptcy … not even in a black swan event like this”. “Your money is safe with Coinbase, just as they always have been,” he said.
Bloomberg reports: the heaviest blow was Binance chief executive Changpeng Zhao, who debuted in the index in January with a net worth of $96 billion. On Wednesday, that was estimated at just $11.6 billion, an eye-watering drop from $84.4 billion.
Tyler and Cameron Winklevoss, co-founders of crypto exchange Gemini, have each lost about $2.2 billion, or 40 percent of their net worth this year, while Sam Bankman-Fried, CEO of crypto exchange FTX, has seen his fortune halved since the end of March to $11.3 billion dollars, according to the report.
Michael Novogratz, CEO of crypto merchant bank Galaxy Digital, has seen his fortune plummet from $8.5 billion to $2.5 billion since November. Mr. Novogratz has promoted terra, the troubled ‘stablecoin’ that is now on the brink of complete collapse.
In January, he proudly showed off a new tattoo of luna, a crypto token in the terra ecosystem.
“I am probably the only man in the world who has both a bitcoin tattoo and a luna tattoo,” he said at a bitcoin conference in Miami last month.
Terra, which is said to be pegged to the US dollar, has lost about half of its value this week, sparking panic in the already feverish crypto asset world.
At one point, terra traded at 30 cents on Wednesday before recovering to around 50 cents, according to the CoinGecko website.
So-called stablecoins such as terra are intended to be less volatile than cryptocurrencies such as bitcoin or ethereum.
Their linkage to traditional currencies is intended to provide investors with greater certainty and certainty.
But terra and several other stablecoins are not backed by revenue streams, instead relying on algorithms to quickly move money between cryptocurrencies as they rise and fall in value.
Luna Foundation Guard, which backs terra, said Monday it had deployed the equivalent of $1.5 billion in cryptocurrencies to stabilize the coin.
The founder of the coin Do Kwon said on Twitter on Tuesday that he was about to present a recovery plan.
“I understand that the past 72 hours have been extremely tough for all of you – know that I am determined to work with all of you to get through this crisis, and we will build from this. Together,” he wrote on Wednesday, outlining a series of measures.
“Terra’s focus has always been on a long-term horizon, and another setback in May, similar to last year, will not deter #LUNAtics. Short-term stumbles don’t determine what you can achieve. It’s about how you react.”
But terra continued to crash, perhaps caught in a broader cryptocurrencies sell-off, pushing bitcoin this week to its lowest level since last July.
US Treasury Secretary Janet Yellen told a Senate committee on Tuesday that the terra episode illustrates “there are risks to financial stability and we need an appropriate framework.”
Anto Paroian of the ARK36 hedge fund, which specializes in crypto assets, said regulation would be a “net positive for the crypto space” in the long run.
“But if stablecoin issuers are regulated as strictly as banks are, it could stifle one of the crypto market’s most innovative, thriving and important sectors,” he added.
— with AFP
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