It’s been a brutal week for the cryptocurrency market.
In the last 24 hours, more than $200 billion of wealth was wiped from the market. Bitcoin (BTC) fell below $30,000, sinking to $26,597, as the TerraUSD (UST) stablecoin crashed far below its $1 peg, applying more downward pressure on the overall market.
But fear not: The cryptocurrency market won’t crash to zero, Sam Bankman-Fried told Coins2Day. Though his net worth has fallen by half since late March, the 30-year-old crypto billionaire isn’t worried. He’s currently worth about $11.3 billion, according to Bloomberg’s Billionaires Index.
“Crypto markets have mostly stabilized, modulo whatever happens in traditional markets,” said Bankman-Fried, CEO of cryptocurrency exchange FTX, in an email to Coins2Day. He was referring to modulo, a math operation, in saying that crypto markets will respond in relation to traditional markets.
“So if stocks recover, I would expect similar in crypto. If stocks keep crashing, so might BTC,” he said.
Bitcoin, the largest cryptocurrency by market value, has moved with traditional markets lately. Behaving similar to a tech stock, the correlation between Bitcoin, the S&P 500, and the Nasdaq has hit all-time highs in recent months.
For example, the 30-day average of the Bitcoin-Nasdaq score has approached an exact one-to-one correlation since January 1, and reached 0.82 this week, the New York Times reported on Wednesday.
This connection became especially apparent after the Federal Reserve indicated it would raise interest rates by half a percentage point last week. Following, the price of Bitcoin began to plummet alongside stocks in a selloff that continues today.
“This week markets took a sudden a U-turn following the Federal Reserve’s meeting,” Lucas Outumuro, head of research at IntoTheBlock, wrote in its newsletter on Friday. “Stock market indices and crypto moved in sync, yet again.”
Though stocks had a rough start this morning, things have seemingly begun to recover.
After being down over 350 points earlier on Thursday, the Dow Jones Industrial Average traded 60 points, or 0.2%. The S&P 500 and the Nasdaq composite are up 0.7% and 1.2%, respectively.
Bitcoin is up 2% in the last hour, currently trading at around $29,383. Ether, the second-largest cryptocurrency by market value, is also up 2.1% in the same timeframe, trading at $1,996.
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