FTX CEO, Sam Bankman-Fried, issued a dire warning that some crypto assets have real crash potential. In a conversation with CNN, SBF warned that a substantial fraction of cryptocurrencies is empty products.
SBF also highlighted that such empty currencies represent a very small portion of crypto assets by market cap or volume. However, when considering by the number of assets, they represent a substantial fraction.
SBF’s Thoughts On Ponzi In Crypto
SBF believes that empty crypto assets form a pattern. According to him, they usually exist as a long tail of assets that are primarily speculative with no use case. The core, however, consists of assets with real usage.
SBF’s beliefs can be supported by evidence. There are currently over 20,000 crypto assets listed on CoinMarketCap. Despite this, Bitcoin and Ethereum contribute the majority of value.
Bankman-Fried also pointed out in a recent Bloomberg interview that he believes many crypto projects are just Ponzi schemes, whose value is derived only from people putting in money.
