The bear market has negatively affected the operations of numerous companies, with some suspending withdrawals.
The bear market has been in play for the past few months. The broader cryptocurrency market has lost more than 65% of its value over the past eight months, with the total market cap now below $1 trillion.
Due to the bear market, some cryptocurrency companies have been struggling to stay afloat. Voyager Digital, one of the leading crypto brokers in the industry, filed for bankruptcy a few hours ago.
However, FTX, one of the top crypto exchanges in the world, has been bailing out some struggling companies. The CEO, Sam Bankman-Fried, told Reuters in an interview that the company still has a few billion left to help struggling companies. He said;
“We’re starting to get a few more companies reaching out to us. Those firms are generally not in dire situations, though some smaller crypto exchanges may still fail, he said, adding that the industry has moved beyond “other big shoes that have to drop.”
Prior to its bankruptcy, Bankman-Fried’s crypto-trading firm, Alameda Research, gave Voyager Digital a $200 million cash and stablecoin revolving credit facility and a facility of bitcoins.
Last month, FTX handed U.S. cryptocurrency lender BlockFi a $250 million revolving credit facility. BlockFi revealed a few days ago that FTX has the option to acquire the cryptocurrency lender for $240 million.
According to Bankman-Fried, the objective of the bailouts is to protect customer assets and to ensure that the broader cryptocurrency market is not affected. He said;
“Having trust with consumers that things will work as advertised is incredibly important and if broken is incredibly hard to get back. It does get increasingly expensive with each one of these. If all that mattered was one single event, we could get above a couple billion.”
He explained that FTX has enough cash available to execute a $2 billion deal if necessary.
When asked about his thoughts on the current bear market, the FTX boss said it is worse than he had anticipated. He said;
“I don’t think it’s an existential threat to the industry, but I do think it is a fair bit worse than I would have anticipated.”
FTX recently overtook Coinbase to become the leading cryptocurrency exchange in the United States in terms of the daily trading volume.