Crypto Billion and Millionaires have now shrunk down to become a rare breed. Let’s face it, what used to be a flex is no longer a status, courtesy of the crypto’s gold, BTC. Timely crypto investments offered investors a chance to taste wealth after their previously failed endeavors.
During the market’s bullish run, some investors amassed a vast fortune comparable to the richest US tech giants. Another accumulated a war fund that he promised would revolutionize philanthropy and politics.
Sam Bankman-Fried, Changpeng Zhao, Mike Novogratz, and other digital asset advocates became multi-billionaires due to the cryptocurrency boom. But as swiftly as they rose to prominence as the new additions of global riches, they are now witnessing an astounding decline in their fortunes.
Why Are The Crypto Billionaires Disappearing?
Seven billionaires whose fortunes linked to cryptocurrencies, who may have been valued quite as much as $145 billion on November 9 when Bitcoin hit a record high of about $69,000, have lost a total of $114 billion since then, according to Bloomberg Billionaires Index.
Many others, like Microstrategy Inc., who made significant Bitcoin bets, have lost most of their fortune, thanks to the sinking prices of their core investment.
From President Nayib Bukele of El Salvador to Chief Executive Officer Michael Saylor, we are all feeling the pain as the price of the most significant digital token in the world has dropped below $21,000, the lowest level since December 2020.
Cryptocurrency Billionaires’ Decreasing Fortunes: A Pain Point The Market Is Such About
With Bitcoin’s value falling to $18,000 in June, the fortune of a few cryptocurrency pioneers and enthusiasts reached its grave. According to Forbes, Sam Bankman-Fried, the founder and CEO of the cryptocurrency exchange FTX, is dropped 23% since his net worth reached $22.5 billion during the past year.
Besides, the largest cryptocurrency investor Bankman-Fried with a total value of $17.2 billion, continues to be placed at no 41 on Forbes 400 list.
The 30-year-old accomplished a lot this past year. He was one of the top donors in April after giving $16 million to super PACs. Additionally, he intends to donate around $100 million to $1 billion to Democrats in the upcoming U.S. presidential election.
Bankman-Fried has assumed a messianic role in the cryptocurrency world. He provided BlockFi with $400 million in financing through FTX in June. An option to purchase the struggling crypto lender for approximately $240 million was available.
Through one of his businesses, Alameda Research, he also gave a $500 million credit to the insolvent lender Voyager Digital. As per the industry media, Bankman-Fried is considering more acquisitions, encouraged by a cash reserve of almost $2 billion at FTX.
Cryptocurrency Crash: Sinking Of The High Profiles
Two high-profile explosions have shaken cryptocurrency in the space of a few weeks after being once thought to usher in a new period of DeFi or decentralized finance. First, following the rumors that it wouldn’t be able to deliver on the profits promised on its products, Celsius, one of the biggest crypto lending platforms, declared Sunday that it was halting all activities on its network.
This news came to light after the supposed stablecoin TerraUSD and its sister token, Luna, collapsed in May. Galaxy Digital Holdings Ltd. founder Novogratz memorialized this event with a tattoo on his left arm.
While the Federal Reserve and other central banks aim to aggressively boost interest rates to combat the most considerable inflation in years. The speed at which cryptocurrency has fallen over the last week stands out despite the turbulence in the world’s markets.
Besides, while there hasn’t been much indication of a breakdown in the US labor market, some crypto billionaires have been forced to revert to layoffs due to the decline in their digital assets. For example, the largest US cryptocurrency exchange, Coinbase Global Inc., announced on Tuesday that it will let off 18% of its personnel, citing the potential for a recession that may trigger a “crypto winter.”
The founder of Coinbase, Brian Armstrong, explained the changes in a blog post by saying, “We grew too quickly. “We cannot successfully handle this uncertain market with our current employee costs.
Even if it is prolonged, the activities we are taking now will give us more confidence in our ability to manage through this period.
The largest cryptocurrency exchange in the world’s founding member, Zhao, claimed that his company has “a very robust war chest” and is increasing recruiting. However, the 44-year-personal old’s fortune, which was once ranked 11th in the world, has dropped 89% to $10.2 billion after he debuted on the Bloomberg income level in January. His company has also come under the attention of US authorities working to control the cryptocurrency market.
The combined wealth of Coinbase’s Armstrong, 39, and co-founder Fred Ehrsam, 34, which was previously $18.1 billion, has dropped to $2.1 billion apiece as a result of the 79% decline in the company’s stock price since its IPO.
Saylor, 57, is holding onto his faith: On Monday, he tweeted “In Bitcoin, We Trust,” accompanied by a fresh image of himself engulfed in lightning. In 2020, he started purchasing Bitcoin for his software company Microstrategy, which experienced a value collapse in the dot-com crisis in 2000.
When its shares hit their all-time high of $1,272 on February 2021, Saylor’s 2.36 million shares would be worth $3 billion. Since then, they have fallen by around 88%.
Will The Crypto Billionaires Recoup Their Wealth?
Several cryptocurrency millionaires need to be added to Forbes’ 400 richest lists. The market slump has cost founders of companies like Binance’s Changpeng Zhao and Fortress Investment Group’s Mike Novogratz.
Bear markets, however, are a common occurrence in the world of digital markets. Therefore, it is not unexpected that crypto enthusiasts believe the current circumstances are merely transitory and that things will improve soon.
The creator of Ethereum, Buterin, has previously said he would welcome reduced cryptocurrency prices. “The folks that are deep in crypto, and especially constructing stuff, a lot of them prefer a down market,” he told Bloomberg News in February.
“One thing most people don’t fully understand: it takes several years, often decades, to get from an infrastructure investment technology innovation (like crypto). It takes time to revamp such a robust ecosystem into popular applications,” tweeted Fred Ehrsam, cofounder and board member of Coinbase.