I remain optimistic for the future of crypto, despite the FTX debacle. In fact, saying you are not bullish on crypto because of FTX is like saying you are not bullish on stocks because of Bernie Madoff.
FTX has nothing to do with blockchain or digital assets, any more than Madoff had anything to do with the stock market. Madoff was just another con artist who led a massive fraud. And it certainly appears that Sam Bankman-Fried is also a con artist who led a massive fraud. Madoff used the stock market to perpetrate his cons; SBF used crypto.
The underlying benefits of blockchain and digital assets are unaffected by FTX and SBF. Blockchain technology is simply software, and it is superior to the software businesses currently use. Blockchain software allows businesses of operate faster, safer, and cheaper, with greater transparency and inclusion – which is why 90% of all banks worldwide are developing the technology, with more than 70,000 software engineers engaged. More than $35 billion has been invested in this technology in the past two years alone; PwC says it will add nearly $2 trillion to the global economy by 2030, and McKinsey says 70% of global GDP will be digital by 2030. BIS says every government will deploy CBDCs by then – China and The Bahamas already have – and there is broad bipartisan support in almost every country.
Even in the aftermath of FTX, the following developments recently took place:
- Brazil passed a law allowing bitcoin to be used as a means of payment and as an investment asset
- Japan’s central bank is testing a CBDC with three megabanks, with the goal of launching its CBDC in 2026
- Singapore’s largest bank used JPMorgan’s blockchain to settle trades – complete in mere hours instead of two days
- Vladimir Putin called for a new system of international settlements based on blockchain and digital currencies
- OpenSea announced that it has paid NFT Creators $1.1 billion in royalties this year
- Warner Music announced that fans can buy and listen to music NFTs through the Polygon blockchain
- Fidelity announced that its retail customers can now trade bitcoin and Ethereum on their brokerage accounts
- Goldman Sachs announced it plans to spend “tens of millions of dollars” to buy or invest in crypto companies. Matthew McDermott, Goldman head of digital assets, said, “We see some really interesting opportunities, priced much more sensibly,” and CEO David Solomon said, “I still see blockchain as a promising technology…[with] far-reaching implications for the global economy.”
The FTX and SBF case is a horrific fraud that has caused massive losses. But it’s not the first fraud and won’t the last. Let’s not get overly distracted by that saga or use it to reach incorrect conclusions.