We Haven’t Bottomed Out Yet

The last 7 days have seen a slight rebound of the crypto market with Bitcoin and Ethereum up 12% in the last week. Furthermore, FTX CEO Sam Bankman-Fried has made a statement earlier in the week stating that the worst of the crypto winter has passed indicating the bottom has been reached. The seven day Bitcoin chart shows that the market has reacted positively to Sam’s encouraging statement.

It’s early to tell whether Sam had simply incredible foresight when calling it, or whether him saying this triggered a lot of people to buy. After Bailing out BlockFi and Voyager, SBF announced that FTX still has a few billion remaining for further bailouts.

This leaves FTX with a $750 million exposure to organisations that are in a dire financial situation, after the bear market has exposed threats in their value offering or cashflow strategy that were previously left unaddressed during the last bull run. The money that was paid to both ($500m to Voyager and $250m to BlockFi) is used to keep those organisation float, and nothing more. In the case of Voyager and BlockFi — they don’t have a reserve anymore, and are forced to operate with everything on the line, inclusive of FTX loan. With a $750 million U.S. dollar exposure to organisation that have taken the bear market rather badly so far, the last thing you would want is for the bear market to continue. It’s likely that if it goes…