One of the biggest names in cryptocurrency may have had one of the worst days as a billionaire, a status that could now be over.
What Happened: With the collapse of the FTX Token (CRYPTO: FTT) and a significant drop in cryptocurrencies Tuesday, many companies related to the sector saw their own values drop significantly.
One company likely already seeing a revised estimate is FTX, which had its FTX.com business acquired by rival Binance on the heels of liquidity issues.
FTX CEO and co-founder Sam Bankman-Fried was previously one of the youngest people to be ranked in the Forbes 400 list. Bankman-Fried had his wealth rise significantly over the past two years with the valuation of FTX rising.
FTX was valued at $32 billion in January.
On Monday, Bankman-Fried was ranked 95th on the Bloomberg Billionaires Index with a worth of $15.6 billion, down $620 million on the year.
After Tuesday’s crypto bloodbath and acquisition news, Bloomberg now estimated Bankman-Fried was worth $1 billion, losing 94% of his wealth in a single day. This marked the largest one-day drop (by percent) in wealth in the history of Bloomberg’s rankings of billionaires.
At his peak, Bankman-Fried was worth $26 billion.
The valuation estimate from Bloomberg was based on Bankman-Fried’s 53% stake in FTX and his co-ownership of Alameda Research, a crypto trading house. Bloomberg estimated Bankman-Fried’s wealth in both units would be wiped out and assigned $1 values to both companies.
Bankman-Fried is a majority owner of FTX.US, which was not part of the acquisition. FTX.US was valued at $8 billion in a January funding round.
Terms of the Binance acquisition have not been made public.
Related Link: Sam Bankman-Fried Welcomes Comparisons To J.P. Morgan
Why It’s Important: Many other investors and co-founders of FTX will likely take a hit on the FTX issues and its sales to Binance. Investors in FTX include Softbank, Temasek and the Ontario Teachers’ Pension Plan.
FTX co-founder Gary Wang was a newcomer to the Forbes 400 list and one of the youngest at the age of 28 with a worth of $5.9 billion earlier this year.
Bankman-Fried has seen comparisons to financier J.P. Morgan for his financing and rescue of companies — in Bankman-Fried's case, cryptocurrency companies — by potentially acquiring assets on the cheap. The list includes BlockFi, Voyager Digital and Celsius. Bankman-Fried once suggested that FTX could even buy a larger bank such as Goldman Sachs (NYSE:GS) Group (NYSE: GS) someday.
Binance CEO Changpeng Zhao, better known as CZ, could rise up the billionaires' list thanks to the deal. Zhao ranked 75th on Monday with a worth of $18.3 billion. Zhao has been one of the biggest losers on the year in terms of wealth, with $77.5 billion wiped out year-to-date.
Bankman-Fried had one of the biggest drops in worth in 2022 that now rivals Meta Platforms Inc (NASDAQ: META) CEO and co-founder Mark Zuckerberg. Ranked 28th by Bloomberg at $37.3 billion, Zuckerberg saw $88.2 billion in wealth disappear in 2022 thanks to the falling price of Meta Platforms stock.
Zuckerberg had his wealth drop by $31 billion in one day in February after an earnings report from Meta Platforms. This was one of the largest one-day drops by dollar value ever seen.
Read Next: Analysis: A Tweet Just Cost Investors $153 Billion, How CZ May Have Tanked FTX, Crypto Before Acquisition
Photo: FTX YouTube video screenshot
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