Founder of Skybridge Capital Anthony ScaramucciFTX CEO Sam Bankman-Fried’s decision to bail out crypto lending platform BlockFi is an indication that we may have reached the end of the bear market.
Participating in a new interview on CNBC, Scaramucci admitted that the industry is facing serious challenges following news that crypto broker Voyager Digital’s platform has suspended trading, deposits and withdrawals.
“I saw this in 1998 in the “Long-Term Capital Management” crisis. We saw and heard in 2008 that there are many people who are using excessive leverage in the system. They were all too enthusiastic. There was ongoing double collateralization. It was like Bernie Madoff married Long Term Capital Management and they created Celsius, and so some of that stuff is frankly awful.”
Scaramucci remains optimistic about the long-term prospect of digital assets, even though the crypto industry is currently dealing with events stemming from excessive speculation, and opposes the notion that cryptocurrencies have no inherent value.
“Crypto-assets use cases continue to increase and there are billions of dollars entering the space, and of course. This is just part of a long-term trend in the cycle, and of course there will be a February-March 2024 halving.”
Last week, the US arm of Bankman-Fried-owned crypto exchange FTX agreed to provide BlockFi with a $400 million line of credit, with the option to buy the troubled company for up to $240 million.
Commenting on support, Scaramucci said:
“Focusing depositors first BlockFi A big shout came from their staff and they got a deal from Sam. It may not have protected the equity there, but it definitely protects the people who put the money in, and I think in Sam’s case, he’s looking for client acquisition and I think he sees this as a vast opportunity to acquire clients through BlockFi…
In addition, Sam’s bailout plans may mean that crypto market bottoms may be coming.”
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.