The return of crypto winter – a term that describes periodic downturns that hit the crypto industry – has everyone feeling cold. The most common question on the lips of retailers and fintech giants is “When will it end?”
If FTX CEO and multi-billionaire Sam Bankman-Fried is right, the depths of winter have probably already passed and spring is on the way.
“I think we’ve already seen the worst of it; still a little bit to go, but not too bad, Bankman-Fried, who is better known as SBF, told Condition for an exclusive cover story.
“I think some bitcoin miners will have some problems, but I think we’re talking about $100 million in total pain, not billions,” he added.
But the 30-year-old added an important caveat to his rosy forecast: crypto winter is coming to an end, but only if the economy doesn’t withstand further major external shocks that sent stock and crypto prices down in the first place.
“If you said Nasdaq it still has another 25% to go and if interest rates actually go up to 7% and if we’re going to be in a recession for two and a half years – in this world I think bitcoin could go down to $15K or $10K. Then there could be new carnage that comes out of that,” he noted.
The recent crypto winter brought what was once a $3 trillion asset class temporarily below $1 trillion in cumulative market capitalization. Falling prices have sent bitcoin, which makes up 41% of the crypto market, to lows not seen since the height of the pandemic in December 2020. At $22,900 as of Friday, the world’s most popular cryptocurrency is it’s still trading down about 51% year-to-date.
The metaphorical cold has also suddenly frozen a number of once-thriving crypto companies such as Three Arrows Capital, Terraform Labs and Voyager Digital.
But FTX weathered the storm and in fact the SBF said the decline was a “healthy takedown” for the industry.
“I think people have had to rethink how they value assets and have had to be a bit more grounded in it and realize that irrational thinking only works in euphoric times,” he said Condition.
As FTX fared better than others during the crisis, Bankman-Fried went on a spending spree that made him either a white knight figure or a modern-day robber baron, depending on your point of view.
This year FTX bought shares in the stock exchange IEX Group Inc. and stock trading platform Robinhood. In the crypto space, FTX provided millions in liquidity to crypto lender BlockFi with a call option last month as well offered to buy all the digital assets of the bankrupt crypto platform Voyager and most of its loansin a joint offering with two other companies led by SBF.
To learn more about where SBF sees crypto prices going, as well as its insights on dealmaking and the future of the industry, be sure to check out the full Condition a conversation.
Register for Features of Fortune email list so you don’t miss our biggest features, exclusive interviews and investigations.