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Sam Bankman-Fried, CEO and founder of crypto derivatives exchange FTX explained how crypto markets are still very much subject to macro-economic forces and regulations.
Recently speaking with Laura Shin on the Unchained Podcast, the FTX chief said:
“Crypto is responsive to general macro environments, and that’s where we’re in. The big reason really is that what we’re seeing driving markets is changes in interest rates, leading to the strengthening and weakening of fiat currencies. When the dollar strengthens, it’s going to strengthen against Exxon, it’s going to strengthen against Amazon, and it’s also going to strengthen against Bitcoin. And when you have a weakening, you’re going to see the inverse. Because a lot of macro is driven by moves in currencies, that’s also going to move crypto prices against dollars.”
Furthermore, Bankman-Fried pointed to regulatory clarity and the relief it could bring to crypto markets:
“I think the thing that I see on the horizon that would potentially have the biggest impact would be if we saw regulatory clarity, especially in the United States. Regulatory regimes come out that allow the industry to operate with clarity in the country while protecting consumers, that’s been the biggest white whale for years, and I think we might be close.”
Reflecting on the past months, the FTX CEO said that cryptocurrency markets are somewhat starting to stabilize after consecutive shocking events:
“We are not seeing sort of continuous outflows. We’re not seeing acute pain in the same way that we were for the week to month after Terra LUNA and the Three Arrows incident. Things are in a little of a holding pattern.”
At time of writing, Bitcoin is moving hands at $20,024 per coin, while Ethereum is valued at $1,356. Both assets are up over the last seven days, 3% and 3% respectively according to CoinMarketCap data.