FTX Stunner just proves that everything can change quickly in Crypto

This is a weekly feature that will look back at the week that was in crypto, blockchain and Web3, offering insights and analysis. Check out last week here.

If you are a crypto investor hoping for a stabilization of the industry, Tuesday was not your day.

Crypto has already seen its share of turmoil this year, but things seemed to reach another level when tokens began to slide this week amid concerns surrounding FTX, the world’s fourth-largest exchange by volume.

Then, in about a day, the crypto world was turned upside down, when Binance CEO Changpeng Zhao tweeted the news his company would buy FTX.com – the non-US exchange associated with FTX – due to a “significant liquidity crisis.”

The news was not only notable because it was the biggest exchange buying one of its biggest competitors. It is also an illustration of how quickly things can change in a market that is already connected at a breakneck pace.

Don’t blink

Earlier this year, FTX raised $400 million at a $32 billion valuation. According to Crunchbase, the company has raised nearly $2 billion with investors that include SoftBank Vision Fund, Singapore’s Temasek Holdings and Sequoia Capital. Zhao and Binance were also early investors in FTX.

FTX CEO and crypto billionaire Sam Bankman-Fried had become one of the industry’s most dominant faces when he seemingly started a one-man crusade to help lead the market out of crypto winter.

In June, it was reported that Bankman-Fried’s quantitative crypto trading firm Alameda Research made a $500 million loan to Voyager Digital. Voyager filed for bankruptcy a few weeks later, and in September FTX submitted the winning bid for the distressed lender’s assets.

It was even reported in June that Bankman-Fried may be eyeing buying asset trading platform Robinhood.

In July, FTX provided a $250 million credit line to lender BlockFi that includes a call option. In a recent interview with CNBC’s Squawk Box, Bankman-Fried said the stock market giant has at least $1 billion to spend on acquisitions and bailouts.

Now, the same stock market giant – famous for hosting its invite-only four-day Crypto Bahamas conference in the spring – was facing liquidity problems before it was bought by its biggest competitor.

Crypto moves fast… well, except for the long winters.

Further reading:

Binance signs letter of intent to acquire FTX.com

Illustration: Dom Guzman