Is the 30 year old billionaire CEO of FTX the next Warren Buffett?

Fortune, one of the world’s most influential business magazines, interviewed founder Sam Bankman-Fried yesterday and put SBF on the cover of its magazine with the title “The Next Buffett?” which symbolises that FTX has become the most influential crypto company in the world and at the same time sees SBF as the representative of the industry.

Explosive head otaku + white knight

“Fortune” described SBF as a friendly, rambunctious, explosive otaku interested in LOL (League of Legends) and fidget spinners.

The above characteristics make him look nothing like the most powerful person in the crypto industry.

However, under the appearance of an otaku, SBF founded the most successful quantitative trading company Alameda Research and crypto derivatives trading platform FTX.

In addition to being a crypto billionaire (worth about $11.5 billion), SBF has recently acquired a new identity: the white knight of the crypto industry, rescuing some crypto startups from liquidation.

Liquidation is positive; BTC could fall further

SBF admitted that although the bear market was predicted, it did not expect to be liquidated on a large scale, nor did it expect it to be so bad.

Nonetheless, he believes two-thirds of the crypto market has fallen so much because of the global economy, and the other third is a problem with the crypto market itself.

“The worst is over, of course; there may be other liquidations, but not as bad as before. I think this bear market is a healthy reshuffle for the crypto industry. People may rethink asset valuations. It will also become more down-to-earth.”

While it feels the worst is over, SBF sees the overall economy as the more significant variable.

He estimated that if the Nasdaq fell 25% and the Federal Reserve raised interest rates to 7%, the world could experience a recession of about two-and-a-half years.

If it does happen, Bitcoin could drop even further. Also, there could be a new round of liquidations.

Greedy when others are fearful?

As we all know, SBF has recently invested in many troubled companies, such as BlockFi and Voyager Digital.

For these investments, Fortune believes this is the practice of Warren Buffett’s famous saying: I am greedy when others are fearful.

SBF also explained his strategy for acquiring shares.

The first consideration is whether the users of those companies can get their assets back and whether the transaction can prevent serial liquidations.

The last question is whether FTX can have some “good feedback” in these transactions.

“Our job isn’t to make amazing acquisitions, the logic here is to make some reasonable deals, even ones that are kind of bad but we can afford.”

An unnamed senior industry source told Fortune that SBF’s generosity had given him many things, including a lot of debt.

In addition to hoping that the future will be what the unnamed person said, SBF also explained the reason for being so generous: trust.

Lack of trust is a huge transaction cost, a lesson that SBF has learned when starting in business.

“A big part of that is trust. In the past, when I was trading, I didn’t want to worry about whether the other party would play me behind my back in 20 ways that I didn’t expect. If there’s a lack of trust between the two sides, the deal won’t work, right?”

Therefore, SBF will set a standard in these acquisitions, cooperate reasonably, and show the other party that FTX does not want to make small moves behind the scenes.

“Think about things from a mutually beneficial perspective, and then we can start thinking about how to share the cake.”

Atypical crypto hero

The crypto community usually likes to embrace heroes like Satoshi Nakamoto or Changpeng Zhao, founder of Binance.

Although SBF seems to be becoming an object of worship in the crypto community, he has done some things that the hero of the currency circle (original Crypto bro) will not do, such as donating political donations to Biden in the 2020 election.

Fortune commented that SBF is now the leader of the crypto community, but it may also provoke dissatisfaction among some crypto believers.

Compared with those heroes in the currency circle who entered the blockchain industry for the reasons of “changing the world” and “destroying the government”, SBF joined the currency circle purely to see the opportunity to make money.

And altruism is about making as much money as possible to give back to society.

Fortune believes that SBF is different from many people in the crypto community.

They do not have luxury consumption such as yachts, sports cars, and parties.

Instead, they pledge to donate most of their wealth because they believe in altruism.

“I would say this: I will do the right thing for people who genuinely believe in this industry. I believe in blockchain because this technology is beneficial and can make the world a better place in concrete ways.”

“I think I’m an example of a group of people who believe in the industry, even if they see it from a different angle. “

Will the worldview of the crypto community lead to a more chaotic world?

The next question is a bit serious and a bit philosophical.

Fortune believes that the world is on fire right now, with the rise of authoritarianism, the climate crisis, etc., so some form of collectivism is needed at this time; that is, everyone needs to consider the interests of the whole and make the right decisions.

Overall favourable decision.

But the crypto community happens to be self-interest-oriented, liberal and individualistic.

Fortune posed a question: Is it possible that the rise of cryptocurrencies could lead to a decline in civic order?

SBF thinks this question is a bit strange.

He believes that either collectivism or individualism can resist authoritarianism.

Collectivism will consider the group’s best interests and resist tyranny, while the individuality represented by cryptocurrency inherently hates authoritarianism, which also resists authoritarianism in a certain way.

SBF believes that many of the world’s problems now come from dominating and trampling other groups, which the crypto community hates.

But at the same time, we must also engage and face the world’s problems together.

“You have to get involved, and cryptocurrencies may be the answer to some of the problems, but not all of them.”

“It’s unlikely that a single tool will solve all the problems.”

Can Bitcoin reach $100,000 in two years?

At the request of Fortune, SBF finally analysed the future prices of Bitcoin and Ethereum.

SBF believes that Eth is difficult to predict and will be more volatile with the upcoming merger, but he can’t be sure in which direction.

Bitcoin is more predictable than Ethereum, but only if the general economy doesn’t get worse.

SBF believes that Bitcoin will gradually recover from the significant liquidation, and the end of the liquidation is a big plus.

In addition, the regulatory structure of Bitcoin has gradually become clear, which is a bullish external shock.

So if there is more bullishness in regulation next year, then with luck, Bitcoin can hit $100,000.

“Regulation is an external shock, and it’s bullish for Bitcoin, so if there’s a significant regulatory bullish next year, with luck, we could see $100,000 next year.”

“But you know, it’s hard to predict. But if you told me that bitcoin might reach $35,000 next year, I would think there was a chance.”

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