If you tuned into this year’s Super Bowl, you likely saw a commercial featuring Larry David, mocking the advent of everything from forks to the light bulb, until a modern-day Larry eventually rejects the final “too good to be true” idea: a cryptocurrency trading platform called FTX.
As if the dots couldn’t be closer together, the final title card laid out the warning in plain English: “Don’t miss out on the next big thing.”
The commercial said little about what FTX even was, relying on an age-old tactic to convince bystanders to jump on board: FOMO. Its CEO, a 30-year-old entrepreneur named Sam Bankman-Fried, spent the last 12 months stoking the FOMO fever, growing into superhero status in the crypto world as he hobnobbed with the rich and famous.
Earlier this spring, the t-shirt-clad visionary was sitting next to President Bill Clinton and former British Prime Minister Tony Blair in the Bahamas, preaching about the future of the confusing—but obviously amazing—world of Web3.
Well yesterday, that “next big thing” — the one that paid for the naming rights of the Miami Heat arena and enlisted the support of Tom Brady and Gisele Bundchen — suffered what is likely to be its fatal blow.
Despite all the celebrity endorsements, mainstream marketing spend, and zealous hoopla, a single tweet from an arch rival platform caused holders of FTX’s cryptocurrency “token” to fear a collapse, prompting many to withdraw their funds and stoking fears of a bank run. Remember that scene in It’s a Wonderful Life?
At first, it appeared that the rival would be both arsonist and firefighter, offering to acquire the struggling company and rescue its customers. But then, they backed out. Now, FTX, a company once seen as the most stable player in the Wild West of cryptocurrency, is in hot water.
What the future holds for cryptocurrency is anyone’s guess. But what is becoming clearer is that some Wall Street veterans (like Warren Buffett’s business partner, Charlie Munger) may have more of a point than some of the crypto world’s fiercest defenders care to admit.
Curious about that other Web3 wonder, NFTs? Check out our Biz Kid guide to NFTs here.