FTX’s crypto contagion 😬
Being terrible at a massive, multiplayer video game like League of Legends generally has a low impact on the world. But going full Leeroy Jenkins IRL while running a massive, globally-connected crypto exchange like Sam Bankman-Fried’s FTX, may be a recipe for global crypto contagion. 🦠
The implosion of FTX has now hurt the price of Bitcoin so much that according to Bank of America (BAC), Bitcoin is now the fifth-biggest asset crash of all time. Ouch! 🩹 Bitcoin’s decline of 77% puts it ahead of even the Nasdaq dot-com crash of the early 2000s. No divine intervention spells can make that better.
The domino effect of Bitcoin’s fall has also knocked the share prices of companies that had bought up bitcoins, like software company MicroStrategy (MSTR) and Block (SQ). MicroStrategy borrowed large amounts to shop for bitcoin, only to watch their share price rise - then fall - in a similar trajectory. 💸
Exchanges and platforms that make money from users buying and selling crypto have also tumbled. The share price of cryptocurrency exchange platform Coinbase (COIN) has crashed 82% this year. 📉 More dominoes have also been falling as confidence in crypto companies craters, and users scramble to withdraw their cash and crypto tokens from exchanges. Last week international crypto-bank Genesis and Winklevoss-twin led exchange, Gemini, restricted lending and withdrawals, while Blockfi is reportedly preparing to file for bankruptcy. 🚩
Even the sports industry has been whacked. FTX was known for making monster sponsorship deals, across the NBA , Major League Baseball and Formula One (FWONK). 🏎️ But among the biggest deals was esports’ - and League of Legends - powerhouse TSM. The world’s most valuable esports organisation suspended a massive sponsorship deal, and probably ending any chance SBF had of ever getting out of his terrible Bronze III League of Legends ranking.
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