It is now clear that 2022 is not the year of cryptocurrencies. NFTs have lost value, crypto companies are still struggling, and even a plan to merge two major companies in an attempt to stay solvent could be gone by the time you read this. It's crazy to think how quickly things can change. In February alone, the world was awash with crypto ads, awash with Super Bowls and billboards, and startups almost everywhere claiming they could sell you Ethereum. Even NFTs were still something people talked about in joint ventures.
However, it seems that we are far from that now. Crypto trader FTX appeared on the brink of collapse on Tuesday as rival Binance prepared to buy it to keep it afloat. As the New York Times reported on Wednesday, the deal was a last-ditch effort to prevent thousands of crypto investors from losing everything.
As news of the FTX collapse spread, crypto markets took a hit, with Bitcoin and Ether down more than 15% since Tuesday.
On Tuesday, Bankman-Fried called the Binance acquisition a step to ensure that FTX customers don't lose money. But the deal has not been completed and its exact terms remain unclear, leaving open the possibility that hundreds of thousands of FTX customers could lose their money and trigger another drop in cryptocurrency prices.
However, this deal may not materialize. As Coindesk reported later on Wednesday, Binance began "aggressively" considering exiting the transaction after FTX's CFOs reviewed it. This means that they may actually be worse than expected.
Binance's non-binding letter of intent to resume the acquisition, which was announced on Tuesday as FTX's financial situation appears to be spiraling out of control, is subject to due diligence by Binance. About half a day into the process of reviewing internal FTX data and loan commitments, the person said Binance was leaning heavily toward pending trades.
What does that mean? Well, if you are currently investing in cryptocurrencies, your wallet may be at risk. News of the merger's collapse sent crypto prices tumbling on Wednesday, and the complete liquidation of FTX would be a disaster for thousands of investors, including founder Sam Bankman-Fried. This is true for some big names who have invested heavily in the market and even promoted the cryptocurrency [Calendar Review] a few months ago. Like Tom Brady. As Gizmodo points out, it appears that Brady has invested heavily in crypto as part of his post-retirement plans.
In 2021, Tom Brady and his then-wife, Brazilian supermodel Gisele Bundchen, bought a large stake in the cryptocurrency exchange FTX, after we already announced a partnership with FTX and its CEO Sam Bankman-Fried in 2020. As brand ambassadors, both of them purchased an undisclosed stake in the company in exchange for the crypto, FTX's original currency, FTX.
That means Brady can keep his investment for now, unless he divests his assets before things take a turn for the worse in recent weeks. But there was probably another big name who did it better than anyone else: Larry David. David, of course, got the infamous layoff while starring in commercials. And the ad's long message isn't "do like Larry David." But on Wednesday, when the Binance/FTX merger was announced, many people on social media were only sharing a short video of that very expensive announcement just eight months ago. That is, the part where Karba 's star was very skeptical.
While Brady certainly got some crypto from his brand ambassador with FTX, it doesn't appear that David was actually responsible for the volatile currency. In an interview with The Hollywood Reporter with David's creative partner, Jeff Schafer, after the ad was released in February, payment methods were already revealed. And even though they apparently begged, everyone involved in the place got paid for their efforts.
"We asked for payment in crypto, but I don't think that was set up for us, and that's fine," Schafer said. "But we're really watching."
On the other hand, it's very good that they got US dollars instead of what FTX can pay them. Otherwise, David may have been making frantic calls this week in an attempt to get out of what appeared to be a very volatile market.