There’s a prevailing sense of optimism in the cryptocurrency industry following the conviction of FTX Executive Sam Bankman-Fried for fraud in New York on Thursday. Investors are hopeful that the verdict will bring back stability to crypto trading. Since the start of this year, the value of Bitcoin has already risen by over 100 percent. The value of several other cryptocurrencies has also surged significantly in recent weeks.
Bankman-Fried, the founder of the now-bankrupt cryptocurrency exchange FTX, faces a potential decades-long prison sentence after being found guilty by a jury. The duration of his imprisonment will be decided in the spring. The former billionaire stated immediately after the verdict that he would contest his conviction.
The collapse of FTX two years ago contributed to Bitcoin’s plunge to its lowest price since 2020. However, this year, Bitcoin, by far the leading cryptocurrency, has already doubled in price.
The conviction of Bankman-Fried signifies “the end of an era,” said Brian Mosoff, the CEO of crypto investment firm Ether Capital, to Bloomberg news agency. According to him, the “wild days” are over.
“We need to learn from this and move on,” responded Paul Veradittakit of venture capital firm Pantera Capital. He stresses the need for stricter regulations in the industry to prevent similar scenarios and also refers to this as a “turning point.”
Crypto Market Stronger After FTX Scandal
Campbell Harvey, Professor of Finance at Duke University, believes that the crypto market will emerge stronger from the FTX scandal. “We learn, often the hard way, but we do learn. We must always think of the bigger picture: improving our financial system, which should lead to financial democracy and more economic growth.”
The FTX bankruptcy doesn’t seem to have deterred investors. Several major financial companies, including BlackRock, have recently filed with the U.S. Securities and Exchange Commission (SEC) to trade so-called Bitcoin Exchange Traded Funds (ETFs). If the SEC approves these applications, which is far from certain, it could result in billions of dollars in additional crypto investments.
Most cryptocurrency prices dropped slightly after the verdict, but the losses were very limited. Bitcoin’s price fell by 1 percent shortly after the verdict.
Bitcoin Doubled in Value in 2023
Although crypto is still far from the ‘investment fever’ of late 2021, the value of Bitcoin and other major tokens has shot up considerably in recent weeks. Bitcoin is now priced at about $34,500. Since the beginning of this year, its value has increased by more than 100 percent. However, the price is still significantly lower than the record high of around $69,000 reached in November 2021.