Crypto billionaires, including the heads of some of the largest trading platforms, have seen their fortunes lost due to the market crash, with one losing more than $120 billion.
Crypto billionaires, including the founders and CEOs of the largest trading platforms, have witnessed the loss of their personal fortunes due to the recent market crash.
Coinbase lost half its value in the past week, with the majority of the selling taking place even before the company reported a $430 million net loss in the first quarter amid falling users and sales.
The massive selloff of cryptocurrencies from bitcoin to ethereum was behind the drop, with shares on the largest US exchange now down 84 percent since it debuted on the stock market in April 2021 to close at $53.72 on Wednesday.
As of Thursday morning, many cryptocurrencies were at their lowest levels since late 2020.
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This has seen the net worth of Coinbase founder Brian Armstrong drop.
Armstrong’s personal fortune was $13.7 billion in November, according to the Bloomberg Billionaires Index, but that’s now only $2.2 billion — a loss of $11.5 billion.
Taking to Twitter, Mr. Armstrong sought to reassure investors and customers that “we have no risk of bankruptcy…even at a black swan event like this.” “Your money is safe on Coinbase, just like it always has been,” he said.
Bloomberg reported that the hardest hit was Binance CEO Changpeng Zhao, who debuted on the index in January with a net worth of $96 billion. By Wednesday, that was only estimated at $11.6 billion, a staggering $84.4 billion drop.
Tyler and Cameron Winklevoss, founders of crypto exchange Gemini, have lost about $2.2 billion, or 40 percent of their fortune this year, while Sam Bankman-Fried, CEO of crypto exchange FTX, has seen his fortune halve. Since the end of March to $11.3 billion, according to the report.
Michael Novogratz, CEO of crypto bank Galaxy Digital, has seen his fortune drop sharply from $8.5 billion to $2.5 billion since November. Novogratz promoted Terra, the now volatile “stablecoin” on the verge of complete collapse.
Last January, he proudly displayed a new tattoo of Luna, a cipher symbol in the Terra ecosystem.
“I am probably the only man in the world who has ever gotten a tattoo of Bitcoin and a tattoo of Luna,” he said at the Bitcoin Conference in Miami last month.
The collapse of the stablecoin
Terra, which is supposed to be pegged to the US dollar, lost about half its value this week, sparking panic in the already overheated world of crypto assets.
According to CoinGecko, Terra traded at one point at 30 cents on Wednesday before recovering to around 50 cents.
So-called stablecoins like terra are supposed to be less volatile than cryptocurrencies like bitcoin or ethereum.
Pegging their currencies to traditional currencies aims to provide investors with greater certainty and security.
But Terra and many other stablecoins are not backed by any revenue streams, and instead rely on algorithms to move funds quickly between cryptocurrencies as they rise and fall in value.
The Luna Foundation Guard, which supports Terra, said Monday that it has deployed the equivalent of $1.5 billion in cryptocurrencies to stabilize the currency.
coin founder Do Kwon He said on Twitter on Tuesday that he is about to present a recovery plan.
“I understand that the past 72 hours have been very difficult for all of you – know that I am determined to work with each and every one of you to overcome this crisis, and we will build our way out of this,” he wrote on Wednesday, “Together,” as he outlined a series of actions.
“Terra’s focus has always been on a long-term time horizon, and another setback in May, similar to last year, will not deter #LUNAtics. Short-term stumbles do not determine what you can achieve. How you respond is what matters.”
But Terra continued to crash, possibly caught in a massive cryptocurrency sell-off that this week saw bitcoin drop to its lowest value since last July.
US Treasury Secretary Janet Yellen told a Senate committee on Tuesday that the Tira incident illustrates “that there are risks to financial stability and we need an appropriate framework.”
Anto Paroian of hedge fund ARK36, which specializes in crypto assets, said that regulation in the long term would be “net positive for the crypto space.”
“But if stablecoin issuers are regulated as rigorously as banks, it could stifle one of the most innovative, thriving and important sectors of the cryptocurrency market,” he added.
– With AFP