FTX effects
Sam Bankman-Fried, the founder of the defunct crypto-exchange FTX, is now deep into his fraud trial, with his ex-partner-turned-star-witness Caroline Ellison taking the stand to testify against him yesterday. Ellison, the former CEO of the FTX-affiliated crypto hedge fund Alameda Research, accused Bankman-Fried of orchestrating the siphoning of billions of dollars in customer deposits from FTX into Alameda to conceal losses.
Amidst the scandalous courtroom drama, the release of Michael Lewis's book on the subject, and the news out this week that Hamas has used digital currencies to fund its war machine, the world of crypto has suddenly been thrust back into the spotlight, after what had been a relatively subdued 2023.
Bitcoin is... quite stable?
For the most prominent cryptocurrency, the chaos of the 2020-2022 era seems long gone. Bitcoin, which was often criticized for being too volatile, hasn’t seen a daily gain or loss of more than 10% this year. That's in stark contrast to 2022 and 2021 when it swung outside this range 9 and 11 times, respectively. All told, the price of Bitcoin has risen more than 60% this year, despite the continued crackdown on major exchanges such as Binance and Coinbase.
But, even though Bitcoin is looking a little bit more stable, enthusiasm for the sector more broadly looks to have vanished, with venture capital funding for crypto companies and projects falling to a 3-year low.
