Sam Bankman-Fried says the Federal Reserve's decision to raise interest rates led to the current crypto crash, resulting in risk “recalibration” for investors
Cryptocurrencies are going through a spectacular crash and the head of one of the largest crypto exchanges …
NPRDavid Gura
Context & Ripple Effects
Before the selloff, Powell had already emphasized cryptocurrency risks while outlining work on a possible central-bank digital currency. Bankman-Fried's explanation places the market move in a broader reassessment of risk rather than treating crypto as insulated from monetary policy.
That framing matters in light of the later joint bank-agency warning on crypto activities, which tied banks' crypto exposure to safe-and-sound-practice concerns. The coverage traces a widening gap between crypto-market risk and conventional financial access.
First-order effects
Investors immediately reprice crypto exposure as risk appetite contracts, amplifying the market crash described by Bankman-Fried.
The Federal Reserve's rate decision becomes a central reference point for crypto participants explaining the selloff and reassessing risk.
Second-order effects
Banks evaluating crypto customers and activities face a clearer stress scenario as falling crypto values reinforce the concerns later raised by the Federal Reserve, FDIC, and OCC.
Crypto firms dependent on investor risk appetite face a more volatile funding and customer environment when their assets trade as part of a broader risk recalibration.
Third-order effects
If crypto continues to move with monetary-policy-driven risk cycles, its claim to independence from conventional finance weakens, deepening the regulatory focus on bank exposure.
The industry may increasingly be judged by whether it can retain access to regulated financial institutions through downturns, not only by market adoption during rallies.
The trend: Crypto is being absorbed into the broader risk-asset cycle, with market volatility feeding a persistent legitimacy gap in regulated finance.
Love Sam..and going to dive in here....but the game is rigged so blaming the FED is a waste of time and just wrong. The players are to blame. Post 2008 we let the players off which was a HUGE mistake. Now the players get off again... https://twitter.com/...
Sam keeps calling for “regulation,” but he advocates for the CFTC—not the SEC—to be in charge of this space. IMO, that means just enough regulation to stave off his upstart competitors, but not enough to adequately protect investors. https://twitter.com/...
1) thanks for the interview, @davidgura! ...he appreciates the difficulty of what the central bank is trying to do, noting it is “caught between a rock and a hard place.” https://twitter.com/... https://twitter.com/...
After the collapse of TerraUSD, as 3AC and Celsius faltered, and before the venture fund he founded lent $485 million to Voyager Digital as the #Bitcoin sell-off continues, @SBF_FTX and I talked about #crypto contagion risk: https://www.npr.org/... https://twitter.com/...
SBF - “responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion, Even if we weren't the ones who caused it, or weren't involved in it.. that's what's healthy for the ecosystem, and I want to do what can help it grow and thrive.” ht…
$VYGVF - Crypto broker Voyager Digital said it secured loans from Alameda Research, the trading outfit from FTX founder Sam Bankman-Fried, to shore up protection for customer assets $VYGVF shrs are -93% over past 52-weeks https://www.bloomberg.com/... via @markets
Three thoughts this AM: 1) The market testing the downside over a low-liquidity long weekend is predictable; 2) SBF stepping in to back Voyager feels big; crypto needed a Buffet-backs-Goldman moment. 3) stETH will hold ultimately hold; the arb is too attractive above ~10%-15%.
This is blunt signaling from @SBF_FTX. So far: a) Backstopped Voyager b) Told NPR firms like FTX had a duty to step in to stop contagion c) Most tellingly, chose to highlight that in a tweet “Here but no further” is the message. This is the kind of thing bottoms are made of. http…
Sam is brilliant. He deliberately drives companies into financially ruin then gives them an out through a loan so they become reliant and indebted. This gives him more influence as he continues to gain territory and complete control of the game board. https://www.bloomberg.com/..…
Being able to secure a line of credit of this magnitude given the current climate says a lot about your business. @Ehrls15 $VGX #VGX #crypto4all #VGXHeroes https://twitter.com/...
SBF just bailed out Voyager...from the losses they suffered from 3AC (still assumed, no announcement yet) Are they protecting their investment or preparing for a take over? Wild time we are in, FTX sweeping the entire crypto market https://twitter.com/...
To better serve and protect our customers in current market conditions, today we announced that we signed a term sheet for a $200 million and 15,000 BTC revolving line of credit with industry leader, Alameda Research. Read the release: https://www.prnewswire.com/...
“Literally, markets are scared. People with money are scared.” Amid the sell-off, shortly before #Bitcoin fell below $18,000 for the first time since 2020, I sat down with billionaire @SBF_FTX, who runs one of the world's largest crypto exchanges. https://www.npr.org/...
Absolutely huge line of credit in this bearish market. Never doubted management at @investvoyager. This is not their first rodeo, they will come out on top out of this bear market. https://twitter.com/...