FTX
- Sam Bankman-Fried said every time cryptocurrencies tumble, it just becomes less messy for the market.
- "Each time that happens, it's a lot less of a shitshow for the space," he told Cointelegraph in a Thursday interview.
- Some factors that drove this week's decline are liquidations, people cashing out and de-risking, he said.
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With every sell-off that hits cryptocurrency markets, the impact becomes less disruptive and the bounceback is easier, crypto billionaire Sam Bankman-Fried said in an interview published Thursday.
The founder and CEO of crypto exchange FTX shared his thoughts with Cointelegraph on Tuesday's 17% plunge for bitcoin, which was accompanied by declines in other digital assets.
"I think it's a classic thing," he said in the video interview. "There's a ton of bullishness in the space. There has been for a while."
"Sometimes there's just a straightforward effect where when people are bullish, things go up," Sam Bankman-Fried said.
"But there's also some times in effect where if things start to go down, you get some liquidations, you get some margin calls, you get some people cashing out and de-risking, you get some of the hot air leaving the space. And that's what we saw over the last few days."
Bitcoin was last trading at $46,137, down 8% in the past week, but still up 60% so far this year, according to data from CoinDesk.
That said, the FTX boss suggested the trend is for crypto markets to be less chaotic when they start to sink. He pointed to slumps in 2020 and 2021, in particular when bitcoin tumbled 13% on May 19 this year.
"Each time that happens, it's a lot less of a shitshow for the space," he said.
For people who were into crypto last year, it was a "really scary moment" in March 2020 when markets crashed and bitcoin lost half its value and fell below $4,000, Bankman-Fried said.
"That's really, really different than how it felt a few months ago in May. It felt like a lot of cooling-off in the space," he noted.
"Now you look at the crash a couple days ago. Frankly, we're already halfway back up, and I think market sentiment is already fairly positive again."
The crypto billionaire added he believes liquidations amounting to around $5 billion drove a majority of the declines this week.
Still, crypto market liquidity has gotten deeper and hot air has become less overheated with more sustained inflows, he said. "I do think that's been a healthy trend for markets," he added.