Cryptocurrency billionaires’ fortunes wiped out in market crash
Categories: Crypto News US
Cryptocurrency billionaires including the founders and CEOs of the largest trading platforms have seen their personal fortunes wiped out by the latest market crash.Coinbase has lost half of its value in the past week, with the majority of the sell-off coming even before the company reported a $US430 million net loss in the first quarter amid declining users and sales.A steep sell-off in cryptocurrencies from bitcoin to ethereum is behind the decline, with shares in the United States’ largest exchange now down 84 per cent since debuting on the stock market in April 2021 to close at $US53.72 on Wednesday. Taking to Twitter, Mr Armstrong sought to reassure investors and customers that “we have no risk of bankruptcy … even in a black swan event like this”. “Your funds are safe at Coinbase, just as they’ve always been,” he said.Tyler and Cameron Winklevoss, co-founders of crypto exchange Gemini, have each lost about $US2.2 billion, or 40 per cent of their wealth this year, while Sam Bankman-Fried, CEO of crypto exchange FTX, has seen his fortune halve since the end of March to $US11.3 billion, according to the report. Michael Novogratz, CEO of crypto merchant bank Galaxy Digital, has seen his fortune plummet from $US8.5 billion to $US2.5 billion since November. Mr Novogratz has promoted terra, the troubled “stablecoin” now on the verge of complete collapse.Terra, which is supposed to be pegged to the US dollar, has lost around half of its value this week, sparking panic in the already febrile world of crypto assets.At one stage terra was trading at 30 cents on Wednesday before recovering to around 50 cents, according to the CoinGecko website. So-called stablecoins like terra are meant to be less volatile than cryptocurrencies such as bitcoin or ethereum.But terra continued to crash, perhaps caught up in a broader sell-off of cryptocurrencies that saw bitcoin plunge this week to its lowest value since last July.US Treasury Secretary Janet Yellen told a Senate committee on Tuesday that the terra episode illustrates “that there are risks to financial stability and we need a framework that’s appropriate”.“But if stablecoin issuers get regulated as strictly as banks, it could suffocate one of the most innovative, thriving, and important sectors of the crypto market,” he added.