Crypto billionaire Sam Bankman-Fried, who founded and is running the top-tier crypto exchange FTX, believes that Bitcoin and other cryptocurrencies will start rising again, and it may happen soon enough.
"Not nervous when Bitcoin slumped to $20,000"
In a recent interview with Bloomberg on David Rubenshtein's show, the FTX boss stated that he was not very nervous when he saw that the flagship cryptocurrency's price dropped below the $30,000 level in May of this year.
The recent slump below the $20,000 level was caused by the speech delivered by Fed Reserve Chairman Jerome Powell, where he said that the U.S. central bank will maintain its hawkish position longer than was expected previously.
When asked whether crypto will make a comeback, Bankman-Fried answered in the affirmative. He believes that, largely, the fall of Bitcoin and of the stock market has been impacted by the macroeconomic environment.
He reckons that the crypto market followed the stock market crash and, thus, if the latter is going to return, so is crypto.
Will crypto back a comeback?— Bloomberg Crypto (@crypto) August 31, 2022
FTX CEO and co-founder Sam Bankman-Fried thinks so. He says he was not nervous when Bitcoin hit $20,000 earlier this year, before its latest drop after Fed Chair Powell's speech recent speech on inflation https://t.co/VMhvljBi5F pic.twitter.com/lfE9yEO5JC
"A lot of weak hands were flushed out from crypto"
When Bitcoin began dropping in May, the FTX CEO expected this road to be "rocky" from the very beginning. And it lived up to his expectations, as many crypto businesses went broke due to the massive price fall of crypto.
Previously, U.Today reported that Sam Bankman-Fried had actually invested approximately $1 billion into crypto platforms as loans. However, in a recent interview, he admitted that he does not expect all of these investments to be profitable but rather to show "mixed results."
He added that lots of things that needed to be flushed out of the crypto market were flushed out from it during the recent price crash.
Here's why this "crisis" is short term, he believes
Sam Bankman-Fried said that, in his view, the current crisis is not a long-term issue. It would have been, per Bankman-Fried, if the Nasdaq index dropped by 30-40% and Bitcoin dropped to $10,000 per coin (as it was before 2020).
In that case, there would have been another "round of pain for the industry," and it would have become more of a medium-to-long-term problem. But the crypto market will start going back up, when the stock market does, the CEO claimed.
"Bitcoin showing resilience now"
Some experts have told Bloomberg that Bitcoin may have reached a bottom by now, dropping roughly 6% after Jerome Powell stated on Aug. 26 that the Federal Reserve intends to stick to its hawkish strategy and, thus, price pressures on the stock market will continue.
In these bearish conditions, traders believe that the BTC fall was rather mild. During previous recessions, cryptocurrencies fell much harder than tech stocks. This time, according to analysts, Bitcoin is showing some resilience, which is "a promising sign."
Presently, Bitcoin has fallen 70.81% from the all-time high reached in November of last year, when it hit $68,789. The current price level is close to the historic price peak Bitcoin reached in December 2017, which was the first significant all-time high for the flagship cryptocurrency.