Skybridge Capital founder Anthony Scaramucci says that FTX CEO Sam Bankman-Fried’s decision to bail out crypto lending platform BlockFi is an indication that we may have reached the bear market’s bottom.
In a new interview on CNBC, Scaramucci admits that the industry is facing serious challenges following news that crypto broker Voyager Digital is suspending trading, deposits and withdrawals on its platform.
“We saw this in 1998 with the Long-Term Capital Management crisis. We saw it in 2008 and listen, there’s a lot of people that were over-leveraged in the system. They were overzealous. There was double collateralization going on. It was almost like Bernie Madoff got married to Long-Term Capital Management and they created Celsius and so some of this stuff is terrible, frankly.”
Although the crypto space is currently dealing with the fallout from excess speculation, Scaramucci remains optimistic of the long-term prospect of digital assets and argues against the idea that cryptocurrencies have no inherent value.
“The use cases [of crypto} are proliferating and there’s billions of dollars moving into the space, and of course, we haven’t got to Sam Bankman-Fried, who’s been willing to backstop the space and put up capital, so lots of smart money there…
This is just part and parcel of a long-term trend in cycle and of course we have the halving coming in February-March of 2024.”
Last week, the US arm of Bankman-Fried’s crypto exchange FTX agreed to provide a $400 million credit line to BlockFi, with an option to acquire the distressed company at a variable price of up to $240 million. Scaramucci comments on the agreement.
“A big shout out to the BlockFi people who focus on depositors first. They took a deal from Sam. It may not have protected the equity there, but it’s certainly protecting the depositors and I think in Sam’s case, he’s looking for customer acquisition, and I think he sees this as a broad opportunity to get those customers through BlockFi…
Sam stepping in here is, I think, providing the context for a bottom.”
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