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FTX US raises $400 million in the midst of crypto slump

FTX US raises $400 million in the midst of crypto slump

The US affiliate of Sam Bankman-Fried’s FTX has just announced an external raise of $400 million, putting the company at a valuation of $8 billion. This comes at a time when crypto is hovering at the brink, waiting for a Federal Reserve announcement this afternoon that could plunge markets into further downward movement.

FTX US announced today that it has raised $400 million in a first external funding round. This values the company at $8 billion, making it one of the most valuable crypto companies in the world.

Investment backers for the round included Softbank’s Vision Fund 2, and the Ontario Teachers’ Pension Plan Board, signalling that confidence in the future of crypto is high, despite the current downturn for the entire sector.

A CNBC article published earlier today quoted Brett Harrison, president of FTX US, as acknowledging that “crypto winter” was a real threat. 

“Volatility cuts both ways,” he said. “With all of the large upturns that we’ve seen in crypto, we have to expect that there are going to be downturns as well. And we’re definitely in that period right now.”

He did also say that the downturn was not just specific to Crypto, and that all markets were experiencing some downside. He added:

“I think that we are going to eventually see a bounce back,”

Federal Reserve chairman Jerome Powell will make a speech at 2pm EST today, at the conclusion of the two-day FOMC meeting. Going into the meeting the Fed has been very hawkish, promising to end tapering, and to start rate hikes as early as March.

Should the Fed confirm this plan in the announcement today, then the recent bounce in markets, especially the crypto market, might become a dead cat bounce, and further downside might be on the way, although some would argue that the Fed news is already priced into markets now.

For FTX US, its business as usual, regardless of any downturns. The company now has 1.2 million registered users, and is looking to get an edge over its main competitors, Robinhood, and Coinbase. 

As is the case with sister company FTX, it is making a major foray into derivatives. To this end, it acquired LedgerX, a futures and options exchange, back in October of last year. Harrison believes that there is enormous potential in derivatives internationally. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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