Bitcoin, Ethereum, Dogecoin, Tesla, and Facebook… Over the past several months, many analysts have talked about how all these entities are potentially related and how they correlate with each other. It is widely believed that altcoins like ETH follow bitcoin’s patterns, while it is alleged that bitcoin and stocks will mimic each other’s behavior. Either way, per Sam Bankman-Fried – the CEO and founder of popular cryptocurrency exchange FTX – believes that all these assets are tied together for another reason… Because they all attract the same investors.
Sam Bankman-Fried: Crypto Is Becoming Stronger with Traders
Bitcoin and cryptocurrencies have exploded over the past year, primarily thanks to the coronavirus pandemic and Congress’ desire to continue overprinting money. We have seen several trillion-dollar stimulus bills produced over the past 12 months alone, and so much money is now flowing ever so freely between our banks, our traders, and our everyday citizens.
Unfortunately, this has led to serious inflation, and many turned to bitcoin and crypto as a means of remaining financially stable as the U.S. dollar began to lose its stamina. In addition, several stocks – such as GameStop – became extremely popular with traders who felt that these assets were needing protection from short traders.
Sam Bankman-Fried explained in a recent interview that cryptocurrencies and mainstream assets now share a tie stronger than ever before. He said:
There are tons and tons of people who have interest in trading crypto and have interest in trading stocks. The moment that a bunch of brokers, including Robinhood, restricted buying of GameStop, like literally that hour hundreds of millions of dollars flowed into Dogecoin, and it was just a really strong signal that it is the same people.
He mentioned that during this time, both GameStop and Dogecoin were experiencing the same price hikes and a lot of other shared patterns, suggesting that traders were not investing in one or the other, but rather each asset simultaneously. Bankman-Fried comments:
These same people who were buying GameStop were buying Dogecoin, and I think, frankly, the same people who were buying Tesla and Facebook were buying bitcoin and Ethereum.
As time has gone by, we have seen more and more clearly that crypto is becoming a mainstream and legitimate asset space. Robinhood is just one of several trading platforms to give way to crypto trading, another big example being PayPal. As arguably the largest digital payment firm in the world, the company first announced it would permit crypto buying and trading last October.
The Space Keeps Growing
Robinhood also said that approximately 17 percent of its transaction-based revenue during the first quarter of 2021 came by way of crypto trades. Bankman-Fried states:
I think we are seeing more and more convergence as crypto gets closer to the mainstream, the mainstream is getting closer and closer to crypto.