Crypto billionaires who were enjoying the high waves in November last year have seen their fortunes shrink in just a few days as cryptocurrencies have continued their downward slide since last week, Fortune reported.
Volatility in cryptocurrency is not something new for crypto investors. In the past, government directives against currencies have caused major crashes. However, this time the threat doesn't come from a single government but the fears of a recession. Conventional investors who had been experimenting with crypto coins so far have now dropped them like hotcakes.
The crypto market plunge continues
Fears turned to reality last week when the U.S. Federal Reserve announced the tightening of its monetary policy. Bitcoin, the most popular cryptocurrency, which had been hovering over the halfway point of its November high for a few months, took a further dip. Ether was no different and plunged as well.
The slide continued over the weekend, and while the Bitcoin seems to have found some feet around $30,000, yesterday, TerraUSD seems to be going through uncertain times. As a stable coin, Terra is pegged against the U.S. dollar and its value wasn't supposed to drop below $1. As of Thursday afternoon, it has dropped to cents, CNET reported. With uncertainty prevailing, investors have continued their sell-off of crypto coins, wiping off $200 billion of market share in just one day.
Crypto billionaires hit the most?
The most visible impact of these sell-offs has been evident on the fortunes of crypto billionaires. Coinbase founder, Brian Armstrong, had a net worth of $13.7 billion last November, which reduced to $8 billion as Bitcoin lost some of its sheens. With the latest slump, the personal fortune stands at $2 billion.
What is worse is that Armstrong had to reach out to the public over Twitter to allay fears that his venture that he had taken public only last year would not go bankrupt.
Michael Novogratz, a vocal supporter of Terra USD, now has a personal fortune of $2.5 billion, unlike the $8.5 billion in November last year. The cryptocurrency he so passionately supported is now on the brink of collapse.
Armstrong and Novogratz's losses are dwarfed by what Changpeng Zhao, the CEO of Binance, is going through. Zhao made a grand entry to the Bloomberg Billionaires Index in January this year with a personal fortune of $96 billion. As of Wednesday, this number had shrunken to $11.6 billion.
Tyler and Cameron Winklevoss, co-founders of crypto exchange Gemini, have sold 40 percent of their wealth since the beginning of this year, while Sam Bankman-Fried, the crypto billionaire, who wants to give away most of his wealth, saw it reduce by nearly 50 percent, between March and now.
These are some really tough times for crypto billionaires.