Author: Cory Maky
Crypto exchange FTX has raised $400 million, pushing its valuation to $32 billion, a sum that will revive questions about a crypto bubble.
The news will no doubt revive questions about the formation of a bubble in the cryptosphere: FTX Trading, one of the largest cryptocurrency exchanges, saw its valuation gain $7 billion in just over three months as the cryptocurrency market crashed.
The crypto market has lost more than $1.2 trillion since hitting highs in early November. And the decline is expected to continue as crypto winter -- a period of continuous decline in the prices of digital currencies -- sets in. The last episode of crypto winter was in 2018.
FTX, founded in 2019 in Hong Kong by 29-year-old Sam Bankman-Fried, has just raised $400 million from big venture capital names suck as Softbank, Temasek, Tiger Global and others. The funding propelled its valuation to $32 billion, more than many established companies.
This news comes less than a week after FTX US, its American sister, also raised $400 million for a valuation now at $8 billion.
FTX, whose most famous ambassadors are the NFL legend Tom Brady and his wife, Gisele Bundchen, is based in the Bahamas and is not accessible to people living in the U.S.
While the new valuation of FTX is a sign of VC-investor confidence in the cryptosphere, it will not comfort critics who see a crypto bubble.
In addition to FTX, OpenSea, the eBay for digital objects such as non-fungible tokens (NFTs), saw its valuationjump from $1.5 billion last July to $13.3 billion early January.
"This round will support our continued mission of delivering innovative products and services to the marketplace as well as expanding our global reach with additional licenses around the world," Bankman-Fried said in a statement.
Betting on Sports
FTX will also, added Bankman-Fried, "look to continue interacting with regulators to facilitate access to digital assets in a safe and compliant manner. We look forward to working alongside our investors to achieve our mission and continue our tremendous growth throughout 2022 and beyond."
The company says it has grown "significantly" since it was valued at $25 billion in October 2021, with its user base growing 60% and its average daily trading volume increasing 40%. Daily volume has reached some $14 billion.
FTX is still behind Binance, the world's largest cryptocurrency exchange, and OKX, according to CoinGecko.
Like its American rival Coinbase (COIN) , FTX makes money by charging fees on transactions. But the platforms are trying to diversify by offering new services such as marketplaces for the sale and purchase of nonfungible token.
FTX is also pushing its pawns into sports marketing and advertising.
Last year, the San Francisco company paid $135 million to secure the naming rights to the home arena of National Basketball Association team Miami Heat. It's also the official crypto exchange of Major League Baseball.
Its biggest catch is counting the prominent football quarterback Tom Brady as a shareholder and main actor in its commercials.
"Tom Brady will be investing in cryptocurrency and currently uses FTX's crypto exchange to trade cryptocurrency. Tom Brady is in on investing in crypto, are you?" stated the company in the commercials.
About the Author:
Cory Maki is a Staff Editor and the Business Development Manager and ParlayMe contributor at Grit Daily.
Article courtesy of our content partner site Grit Daily