![]() Central bankers’ comments at the 115-year-old organisation have moved markets. "It's hard for me to see ether displacing bitcoin, although I could be wrong there," he said.The Economic Club of New York has hosted kings, prime ministers, and presidents, as well as ’s Jeff Bezos and JPMorgan Chase’s Jamie Dimon. The multiple uses of the network, plus the fact that its carbon footprint is considerably smaller than that of bitcoin, have burnished ether's popularity.īankman-Fried said he would be surprised to see ether overtake bitcoin, considering bitcoin has the massive advantage of being the first and agreed-upon default cryptocurrency, which is worth a lot.įor all its diverse uses, Ethereum has its own issues, such as serious scaling challenges, which are going to hold it back, Bankman-Fried said. The Ethereum network houses a variety of decentralized finance applications, including nonfungible tokens, or NFTs, which have been all the rage among artists and celebrities. In recent weeks, the Ethereum blockchain's native currency, ether, has made its case as a challenger to bitcoin, as the currency has surged more than 100% in price since the start of April with a market capitalization of $450 billion.īitcoin's 93% gain so far this year has been dwarfed by ether's 450% increase in that time. The most traded cryptocurrency is bitcoin, which has a market capitalization near $1 trillion. "But with the caveat that you have to make sure that you don't f- yourself over if there's a temporary bear market, that you don't put yourself in a position where you can't survive that." Bitcoin vs. That's where you should be focusing a lot of your thoughts because that's where it matters the most what you do," Bankman-Fried said. "Often, a lot of the upside is in the cases where the bull market stays. He has formed an appreciation for how great crypto investors have been able to operate in different market environments and is spending more time thinking about strategies that set him up well for future cycles, something he said he didn't have great instincts for previously. "I think one of the interesting things is the blurring line between trader and an investor in crypto," Bankman-Fried said.īankman-Fried's approach to trading is evolving. ![]() Second, try to figure out what edge you have, such as great technology or a good instinct for the direction of the market, he said. Bankman-Fried spent several years learning his craft at the trading firm Jane Street. "It's not a super forgiving place to try and get into," he said.įirst, get to know the market by learning from the experts. There is fierce competition from other traders in the cryptocurrency market, and breaking in is hard, Bankman-Fried said. The platform is designed to discourage mass liquidations by limiting the size of the positions traders can put on with really high leverage and having an engine that liquidates only as much as it needs to, Bankman-Fried said. Some might assume that by FTX simplifying the collateralization process, it would face more risk when it came to liquidations, a process that occurs when traders don't have enough collateral to support their position.īut when a recent flash crash caused a 17% drop in the value of bitcoin and liquidations worth $9.3 billion on April 17, FTX fared better than most. "It's one of the rare times that you find a change, which both simplifies the product and makes it more powerful," Bankman-Fried said. This meant traders could trade anything on FTX through one margin wallet, as long as they had enough collateral to meet their total position size. Within two years, FTX went from relatively unknown to one of the top five derivative-trading exchanges, with more than $400 billion in monthly trading volume in April.įTX changed the trading game by enabling the management of collateral through a single wallet. But it seemed high enough upside that it was worth going for anyway," Bankman-Fried said. "We thought the odds are pretty high that we would fail on the exchange because we thought we would just never get any users and that would be that. His goal is to create an alternative to the "s- show exchanges" that existed when he was trading in 20, Bankman-Fried said in an interview with Insider. This story is available exclusively to Business InsiderĪnd start reading now. ![]() Account icon An icon in the shape of a person's head and shoulders.
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