Bitcoin and other cryptocurrencies billionaires fortunes disappear as fast as they come, according to the Bloomberg Billionaires Index…
One amassed a fortune that surpassed that of the greatest US IT magnates. Another amassed a war chest, promising to transform politics and charities. After previous initiatives failed, some were granted a second chance at wealth.
Changpeng Zhao, Sam Bankman-Fried, Mike Novogratz, and a few more digital-asset evangelists became multi-billionaires thanks to the Bitcoin mania. But, just as swiftly as they rose to prominence as the new faces of global riches, their fortunes are vanishing at an alarming rate.
According to the Bloomberg Billionaires Index, seven billionaires with fortunes related to crypto were worth as much as $145 billion on Nov. 9, when Bitcoin reached a new high of about $69,000. Since then, they have lost a combined $114 billion. Many others, from Microstrategy Inc. Chief Executive Officer Michael Saylor to El Salvador President Nayib Bukele, are feeling the pain after Bitcoin’s price fell below $23,000 on Monday, the lowest since December 2020.
Crypto has been rocked by two high-profile implosions in the span of weeks, which were once hailed as ushering in a new era of decentralized finance. Celsius, one of the most popular crypto lending platforms, declared on Sunday that all transactions on its network had been halted due to concerns that it would not be able to deliver the returns promised on certain of its products. That came after the collapse in May of the so-called stablecoin TerraUSD and its sister token, Luna — which is commemorated by a tattoo on the left arm of Galaxy Digital Holdings Ltd founder Michael Novogratz.
While global markets are in turmoil as the Federal Reserve and other central banks plan to aggressively raise interest rates to fight the highest inflation in decades, the speed at which crypto has plunged in recent weeks stands out. And while there’s little evidence of cracks so far in the broader US labor market, the losses in digital assets have led some crypto billionaires to resort to job cuts.
Zhao, founder of Binance, the world’s largest cryptocurrency exchange, said his firm has “a very healthy war chest” and is expanding hiring. Still, the 44-year-old has seen his personal fortune, once the world’s 11th-largest, tumble 89% to $10.2 billion since he debuted on the Bloomberg wealth index in January. His firm has also become a focal point for US investigators seeking to rein in the crypto industry.
Bankman-Fried, the 30-year-old CEO of crypto trading platform FTX, is down 66% since his fortune peaked at $26 billion. That could dent his plans to give away his money and spend big in politics. He poured $16 million into super PACs in April, making him one of the top donors to outside groups, and has said he expects to give more than $100 million during the next presidential election to support Democrats.
Novogratz, 57, whose macro fund at Fortress Investment Group was liquidated in 2015 following two years of losses, has staked his comeback on crypto, recently calling Terra a “big idea that failed.” His fortune fell on Monday to $2.1 billion, lower than when he debuted on the Bloomberg Billionaires Index in December 2020, when Bitcoin traded around $29,000.
Meanwhile, Cameron and Tyler Winklevoss’ fortunes have plummeted to $3 billion each, down from $5.9 billion each. The 40-year-old twin founders of cryptocurrency exchange Gemini, which said earlier this month that it would lay off around 10% of its workers, are currently on the road with their rock band Mars Junction.
As crypto values continued to fall, Coinbase Global Inc., the largest US crypto exchange, canceled job offers. Founders Brian Armstrong, 39, and Fred Ehrsam, 34, were once worth a combined $18.1 billion, but their fortunes have plummeted to $2.1 billion apiece as the company’s stock has dropped 79 percent since its initial public offering.
Saylor, 57, is sticking to his guns: On Monday, he tweeted, “In Bitcoin We Trust,” accompanied with a fresh photo of himself surrounded by lightning. Microstrategy, the software company he established, began buying Bitcoin in 2020 after its value plummeted after the dot-com bubble in 2000. Its stock reached a high of $1,272 in February 2021, making the 2.36 million shares Saylor presently controls worth $3 billion. They’ve since plummeted about 88%.
Bukele, El Salvador’s 40-year-old president, hadn’t tweeted about Monday’s plunge in crypto as of 4:45 p.m. in New York. About a week ago was the one-year anniversary of his push to make Bitcoin legal tender. At the time, it traded at about $36,000.