17 Key Takeaways From the Generalist's Profile of Sam Bankman Fried and FTX
FTX Trilogy, Part 1: The Prince of Risk
https://www.readthegeneralist.com/briefing/ftx-1
SBF seems to thrive in disorder.
SBF’s preference for chaos feels especially well-suited to the market in which he operates
From FTX’s inception, SBF has been willing to act controversially to achieve his goals.
Though he may be chaotic, SBF is also calculated.
You get the sense that every SBF opinion has been constructed from scratch, rather than borrowed offhand from some prior teacher.
FTX Trilogy, Part 2: Speedrun
https://www.readthegeneralist.com/briefing/ftx-2
Offering futures for altcoins within the first few months of operating is not the kind of move a more cautious exchange like Coinbase would make; neither is offering 101x leverage given the riskiness of such investments.
FTX is not a monolith. Unlike most of its age, the company is really a constellation of different entities that formally and informally interact.
FTX has become the home of the market’s most vigorous traders. It’s done so by building a performant core, providing high leverage, and offering access to unique markets
Beyond spot and futures trading, FTX offers access to the following markets:
Tokenized stocks
Leveraged tokens
Volatility tokens
Prediction markets
FX
FTX’s userbase benefits from some serious whales. More than 25% of total volume comes from a grouping that moves more than $30 billion per month. More than 50% comes from a segment that moves more than $3 billion. This is a market designed for those with considerable appetites.
FTX strongly prefers hiring people that actually understand the product and genuinely know trading. The result is a culture more similar to an East Coast quant fund than a Valley startup
With just 82 employees, the company is able to operate one of the world’s largest crypto exchanges
Crypto people think about tech. Sam thinks about CAC."
FTX essentially purchased 6.5 million Blockfolio users for $150 million — a CAC of $23…it’s not hard to see how Blockfolio compliments FTX…FTX adds a large and engaged userbase in geographies it has scarcely penetrated
FTX Trilogy, Part 3: The Everything Exchange
https://www.readthegeneralist.com/briefing/ftx-3
If FTX succeeds in maintaining its trajectory, we may look back on this period as the company’s “book” era ala Amazon.
Today, FTX is mostly a cryptocurrency exchange, but that might not be the case for long.
Four paths the company could pursue to grow its footprint
Betting on sports. FTX’s sponsorships may herald greater involvement in the sector.
Crypto Expansion FTX can bolster its institutional and consumer crypto offerings.
Transform into a full-stack financial business
Buy a social network to bulk acquire customers and mainstream crypto.
There’s a reason why one internal document lists DraftKings as a competitor.
In SBF’s mind, the distinction between traditional finance and crypto is an artificial boundary. When I asked him about FTX’s future, he quickly swiveled into talking about the desire to build out a fully-fledged financial giant, a kind of monetary super-app handling payments, custody, and of course, investing across asset classes
Fintech is converging, with market leaders featurizing each other with regularity.
Bonus: 3 Key Takeaways from Race Capital’s FTX Deal Memo Referenced in the Generalist Profile
https://files.elfsightcdn.com/f3eda198-c53d-4a49-88ff-ffc00ede72c5/ae30ab4a-b4d2-4935-afc6-f250cc2a8506.pdf
One of our core thesis areas for Race Capital is financial infrastructure...Because of FTX’s trading expertise, founder market fit, and early traction - FTX has a chance to become the #1 derivatives exchange in the world for the crypto market.
from a market landscape perspective, BitMEX is currently under investigation and because of this, there has seen a spike in net-outflow of capital from the exchange.
We believe this has led to an opening in the market right now, just as FTX is preparing for their official launch on June 29th, 2019. If FTX can supplant BitMEX as the major futures exchange, a massive amount of value will accrue to the FTX platform.
Investment considerations
Unique positioning - FTX was built by traders for traders, and has shot at becoming the #1 crypto future trading exchange in the world.
Meaningful growth opportunities
FTX has 3 major growth drivers:
1. Full suite of futures products
2. Unique Market Infrastructure
3. Expanding TAM of future traders
Did someone share this with you?
Sign up for the CryptoJungle newsletter to stay up to date on our ongoing quest to hack through the weeds to find the crypto gems.
Looking for Help?