Recent Bitcoin Crash Below $ 30,000 Was “Much More Orderly” Than Previous Crypto Crashes, Says Sam Bankman-Fried | Currency News | Financial and business news

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Sam Bankman-Fried, co-founder and CEO of the FTX crypto exchange.

Lam Yik / Bloomberg via Getty Images

Bitcoin’s fall of less than $ 30,000 in July was “much more orderly” than previous drops in crypto prices, FTX CEO Sam Bankman-Fried told Bloomberg’s “Odd Lots” podcast. The 29-year-old billionaire told Bloomberg that many crypto are worried about leverage in the system. FTX recently reduced the maximum leverage it offers from 100x to 20x. Sign up for our daily newsletter, 10 things before the opening bell here.

The way Bitcoin’s under $ 30,000 fall in July played out was “much more orderly” than previous drops in crypto prices, FTX CEO Sam Bankman-Fried told the podcast ” Odd Lots ”from Bloomberg.

“There were $ 20 billion in long positions that were probably liquidated over a period of a week,” he said. “But the industry was able to absorb that. The infrastructure and liquidity in this space have withstood the liquidations much better than a year ago.”

Some crypto exchanges have been criticized for service outages during large price drops. In May, Binance experienced an hour-long freeze that stalled some users, forcing them to helplessly watch their leveraged bets forced into liquidation. Such episodes, while still happening, were once surprisingly common, even for big exchanges like Coinbase and Binance.

The 29-year-old crypto billionaire told Bloomberg that a lot of crypto worries about leverage in the system when prices collapse and leveraged positions are liquidated. But fewer people are also ready to recognize the role of leverage in times of crypto boom when prices are going up.

“I think a lot of times people want to live in a fantasy land where leverage can drive the markets up but not down. That’s not really how it works. For better or for worse, I think. firmly that the crypto ecosystem is in a stronger and healthier position today because of leverage, ”compared to a world without leverage, he said.

Bankman-Fried, whose exchange recently reduced the maximum leverage it offers from 100x to 20x, explained that the move reduced some of the crypto excesses, noting that few FTX users were using a 50x or 100x leverage.

“It wasn’t very relevant to us or most of our users or their experience. Frankly, it’s not very useful economically either. [Taking on 100x or 50x leverage,] you can’t really use it to cover something, because you could be wound up in a print, in about 15 seconds, ”he said.

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