Several billionaires in the crypto sector saw their earnings evaporate eight months after the crypto euphoria they capitalized on. Prior to the losses, they were dubbed as the sharks of alternative finance in 2021 and the bosses of the so-called "New Wall Street."
Binance Founder and CEO Changpeng Zhao recorded a $95.8 billion dollar net worth on Nov. 9, 2021 – a day before the price of Bitcoin peaked at its all-time high. However, the Bloomberg Billionaires Index recorded his fortune at an estimated $10.2 billion on June 13. The founder of the largest crypto exchange by volume lost $85.6 billion in an eight-month period.
Samuel Bankman Fried, the founder of crypto trading platform FTX.com, also saw his fortune decrease to $8.9 billion. His net worth, originally at $15.1 billion, dropped by $6.2 billion due to the volatility of the crypto market.
Former Goldman Sachs banker Mike Novogratz was not spared from losses, with his net worth of $6.4 billion dropping to $2.1 billion. Novogratz, known as a crypto evangelist, established crypto-centered financial services company Galaxy Digital in 2018 alongside two others.
Fred Ehrsam and Brian Armstrong, the founders of crypto exchange platform Coinbase, also bore the brunt of plunging Bitcoin prices. Armstrong's estimated $13.7 billion net worth in November 2021 fell to $2.1 billion as of writing. Meanwhile, Ehrsam's $4.5 billion net worth dropped by more than half to $2.1 billion.
Tyler and Cameron Winklevoss, founders of crypto exchange platform Gemini, saw their net worth amounting to $3 billion each fell to just $800 million.
The Winklevoss brothers accused Meta CEO Mark Zuckerberg of stealing their idea of a social network to create Facebook, but eventually settled. They used a portion of their multi-million dollar settlement with Zuckerberg to buy crypto tokens and launch Gemini in 2014.
Fortunes shrink as Bitcoin's price heads downhill
The diminished fortunes of the crypto billionaires followed the price of crypto tokens, such as Bitcoin, hopping on a downward trend. This downturn had been going on for several weeks, but accelerated by June 13 as Bitcoin traded to its lowest levels for 18 months. According to data firm CoinGecko, the crypto market has lost over $2.1 trillion since its November 2021 highs. (Related: Bitcoin's 50 percent drop in value hits crypto loans and derivatives.)
CNBC reported on June 13 that the price of Bitcoin fell below the $23,000 mark on that day. At one point, it hit around $22,764 before settling at $23,351. Nevertheless, Bitcoin's current price is but a third of the $69,000 highs it recorded in November.
According to the CNBC report, macroeconomic factors – such as rampant inflation and the Federal Reserve's impending interest rate hike to control rising prices – are playing a role in bearishness in the crypto markets.
Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, shared his thoughts on Bitcoin's price plunge.
"Since November 2021, sentiment has changed drastically – given the Fed rate hikes and inflation management. We're also potentially looking at a recession, given the Fed may need to finally tackle the demand side to manage inflation," he told CNBC.
"All this points to the market not completely having bottomed. Unless the Fed is able to take a breather, we're probably not going to see bullishness return."
Ayyar ultimately warned that the world "could see much lower Bitcoin prices over the next month or two."
Watch this video below discussing how the Fed's interest rate hikes affect the price of Bitcoin.
This video is from the Chinese taking down EVIL CCP channel on Brighteon.com.
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