There are dozens of cases of people who made huge fortunes by investing in cryptocurrencies and now lost them. The seven most powerful investors in the world of cryptos have lost, in fact, $144 billion in a few weeks.
But the one that stands out is that of the “boss” of the world’s largest crypto exchange, Changpeng Zhao.
The 44-year-old Chinese-Canadian businessman, known internationally as CZ, is now officially the man who lost the most money in human history. He has so far lost – brace yourselves – some $87 billion – about 10% of his fortune.
Times are changing fast. Zhao, owner of 90% of Binance, was watching his fortune grow at an explosive rate amid the bull market (or bubble?) madness of cryptocurrencies.
His exchange, last year managed 34.1 trillion dollars in crypto trading, while this year it was managing about $5 billion a day until the collapse.
Then, in 2021, when Zhao’s fortune was estimated at a little less than $100 billion (in fact he has even made it to the Top 20 of the world’s richest people with his $95.8 billion net worth a year ago), he had caused outrage when he stated that “poor people are saying bad things about Binance”. But now that his fortune has shrunk to less than $10.2 billion, he declares that “I’m poor again.”
The Chinese-born and Canadian-raised – but Singaporean permanent resident – businessman has stated that 100% of his liquid assets are invested in cryptocurrencies.
That’s what went wrong for him. Of his investment in Luna, some $11 billion, he has nothing left, and his biggest losses are in bitcoin. In 134 days, Zhao lost about 10% of his fortune; although according to some this is no longer 10.2 billion, but has shrunk to $1.5 billion.
He, on Twitter, explains that it is “another cycle” and that he’s been through this before, twice before, watching his fortune shrink during the cryptocurrency bear market and then grow again afterwards.
But regardless of what happens in the future, he’s gone down in history as the man who lost the most money.
He surpassed the negative record of Japanese Softbank founder Masayoshi Son, who, during the dotcom bubble, had lost $77 billion almost overnight. When Softbank’s market capitalization fell from $200 billion to $2.5 billion (he lost 98%), his fortune shrank from $78 billion to “just” 1.1.
The other billionaires
Of course, Zhao is not the only crypto-billionaire who lost a fortune with the collapse of cryptos.
There are dozens more. The example of Coinbase founder and major shareholder Brian Armstrong is typical. While his company was firing the 18% of its workforce to survive the crypto-winter, Armstrong’s fortune dropped 84% from $13.7 billion to $2.1 billion.
The former Goldman Sachs banker and founder of the investment firm Galaxy Digital, Mike Novogratz, may be very lost from his involvement in cryptocurrencies, but he says his banking experience saved him, as he had risk management, had “set aside” some of the profits and diversified his investment portfolio.
Novogratz was so heavily invested in stablecoins that he even had a tattoo on his arm – a wolf howling at the moon where the word “Luna” was written.
Today, having seen his fortune decline from $8.5 billion to less than $2.1 billion, he says that “my tattoo will always remind me that investing requires humility.”
Fred Ehrsam, co-owner of Binance and founder of the cryptocurrency investment firm Paradigm, before the crypto winter he had a fortune of $4.5 billion. 99% of his source of wealth was cryptocurrencies and it was these that dissipated 53% of his net worth.
Today, his fortune is estimated at less than $2.1 billion. Samual Bankman-Fried saw his fortune drop to $8.9, from $15.1 billion in the same period.
Twin brothers Tyler and Cameron Winklevoss became known to the general public from the film “The Social Network” which revealed their dispute with Mark Zuckerberg over Facebook’s “paternity”.
The, also known as “Twinklevoss” invested their future in cryptocurrencies, with investments in crypto and stable coins but mainly in trading, with the operation of an exchange.
They lost a little less than $1 billion each, seeing their fortunes drop from 3.8 to 3 billion.
The bad news for the above billionaires who lost a combined more than $144 billion, is that the “crypto-winter” seems to be continuing and so do their losses.
The good news is that they are not in the same predicament as thousands of small investors who, in the pursuit of quick and easy riches, invested everything they had and lost everything…
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