The FTX collapse caused the entire cryptocurrency space to live through one of the worst moments in its existence, including up-and-coming companies known as crypto-start-ups.
During its fall, Sam Bankman-Fried’s FTX brought along with it all the sectors related to digital assets. Today, the total crypto market cap reached the same level as it was before the rush of 2020/2021, while all the top cryptocurrencies lost about 80% of value throughout this year.
Bitcoin retracted from $21,000 to around $17,000 — while Ethereum fell from $1,600 to trading at around a thousand dollars as we speak.
One of the most affected cryptocurrencies was Solana. A former top-10 asset, Solana had millions invested in FTX, and since its collapse, the Sol token lost two-thirds of its value in the last month alone.
A less talked about sector, crypto start-ups were also hugely affected by the crash.
The cryptocurrency exchanges Bybit and Swyftx reported layoffs of 30% and 35% of their staff, respectively. The announcements came less than a week after Kraken revealed a similar surge in its workforce.
“As we’ve just announced to the team, Swyftx has no direct exposure to FTX, but we are not immune to the fallout it has caused in the crypto markets.” Alex Harper, SwiftX CEO said in a statement. “As a result, we have to prepare in advance for a worst-case scenario of further significant drops in global trade volumes during H1 next year and the potential for more black swan-type events.”
Binance Raising a Fund to Protect Crypto Start-ups
Binance Labs, the company’s venture arm, has raised $500 million for a fund focused on Web3 start-ups.
The funds were provided by DST Global and Breyer Capital partners, as well as unnamed family offices and corporations. It comes after Andreessen Horowitz announced a massive $4.5 billion fund to invest in crypto start-ups.
Binance Labs intends to use the recent collapse in digital assets to find founders working on what it believes to be the next big thing in technology. It will divide its investments into three categories: pre-seed, early-stage, and growth equity, and it will invest in both tokens and shares.