How did the assets of the top richest billionaires in the crypto industry “evaporate” before the Terra-UST crisis?

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2022-05-13 14:08:20

Not only did individual investors suffer heavy losses because of the Terra and UST crashes, but the assets of the richest people in the crypto industry also “evaporated” extremely quickly.

How did the assets of the top richest billionaires in the crypto industry “evaporate” before the Terra-UST crisis?

The collapsed “Domino piece” named Terra-UST

As CHK continuously updated, despite certain efforts through CEO Do Kwon’s proposal declaring “sacrifice LUNA to save UST” as well as removing 1.3 billion UST from circulation within the past 24 hours, but The prices of both LUNA and UST are constantly falling rapidly. While LUNA continues to fall below $0.04, UST has yet to regain the peg and is trading at $0.48.

1W chart of LUNA/USDT price.  Source: Binance
1W chart of LUNA/USDT price. Source: Binance
1D chart of UST/USDT price.  Source: Binance
1D chart of UST/USDT price. Source: Binance

Even worse, when it was the collapse of the UST domino that made a lot of investors panic, and started to trigger a terrible sell-off pressure on the entire market, pushing the price of Bitcoin down. fell below the threshold of $ 27,000, despite the context of many well-known funds in the industry speaking to reassure the community about Terra.

BTC/USDT price 1D chart.  Source: Binance
BTC/USDT price 1D chart. Source: Binance

This led to a series of stablecoins depreciating simultaneously on the afternoon of May 12, especially with the presence of “king” Tether (USDT) and a number of other algorithmic stablecoins such as Tron’s USDD or Near Protocol’s USN. .

To be able to grasp the latest overview details about this case, please read the details through the series of articles below:

The largest fish in the market are also “stranded”.

And the total asset value of the top richest billionaires in the cryptocurrency industry in 2022 also “evaporates” at a dizzying speed, reaching tens of billions of dollars.

The most serious is the case of the leading billionaire in the market, Binance CEO Changpeng Zhao. According to Forbes statistics, he has lost about 37.6 billion USD. It is understandable that he has repeatedly stated that he only holds Bitcoin (BTC) and Binance Coin (BNB). In addition, during the LUNA crisis, many investors achieved huge profits through LUNA short orders, this is also the reason why the money of the Binance boss was so “flying away” that Binance had to cancel listing of LUNA futures trading pairs.

Next is the Founder and CEO of the FTX exchange Sam Bankman-Fried. Although he suffered a loss of up to 3 billion USD, the CEO of FTX did not show any wavering attitude. He even said that although Terra’s case is really serious, it is not so big that it can drag the entire stablecoin array into a recession.

$4.4 billion is the aftermath for Coinbase CEO Brian Armstrong. Besides being affected by the general market situation, he has to deal with the rather bad business situation of the company recently. Coinbase exchange lost 430 million USD in Q1/2022, causing COIN stock price to continuously bottom in April and Brian Armstrong is holding 19% of Coinbase shares.

The rest of the above list are all prominent leaders of various exchanges and platforms including Gemini exchange CEO pair Cameron Winklevoss and Tyler Winklevoss ($-300 million), Founder Ripple Chris Larsen (-700 million USD), venture capitalist Tim Draper (-270 million USD), etc. Most of them own a huge amount of cryptocurrencies, so their assets disappear quickly. It’s also not surprising.

On the traditional side, the real Bitcoin whale MicroStrategy lost $694 million. Part of that comes from a losing BTC investment. Currently MicroStrategy holds 129,218 Bitcoins with a total purchase cost of $3.97 billion and an average purchase price of $30,700 per BTC.

The rest is the negative performance of the company’s shares on the stock market, declining from nearly $ 400 to $ 167 in just 1 week of May, no different from the fluctuation of crypto.

1D chart of MSTR/USD stock price.  Source: TradingView
1D chart of MSTR/USD stock price. Source: TradingView

Even so, MicroStrategy still confidently stated that it will not sell any Bitcoin despite the risk of liquidation of a $205 million BTC mortgage loan from Silvergate Bank in March 2022 to buy more Bitcoin. Instead, Microstrategy will use some other collateral to pledge if the worst-case scenario is the value of Bitcoin drops below $3,562 causing Microstrategy to run out of BTC to repay the loan.

On the other hand, out of the 10 listed companies that own the largest amount of Bitcoin in the world, there are 5 companies that are suffering from a loss of about 100,000 USD to more than 300 million USD at the current BTC price compared to their investment. Their initial investments include MicroStrategy, Tesla, Coinbase, NEXON, and cryptocurrency mining company Marathon. Notably, these giants used to x2 at the time Bitcoin started to grow strongly in October 2021 to establish an ATH at $69,000.

The largest amount of Bitcoin is being held by the top 10 companies listed on the stock exchange as of May 12, 2022.  Source: CoinGecko
The largest amount of Bitcoin is being held by the top 10 companies listed on the stock exchange as of May 12, 2022. Source: CoinGecko

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