Profile: crypto billionaire Sam Bankman-Fried

Sure, you might have heard about a crypto billionaire or two. Especially if you follow the Forbes list of billionaire profiles. Some newcomers to the sector are aware that Coinbase CEO Brian Armstrong is a crypto billionaire, for example, or that Vitalik Buterin is also a billionaire thanks to his massive Ether holdings. 

However, one crypto billionaire has been garnering the most attention in recent years that is inspiring the community is Sam Bankman-Fried.

There’s no other way to put this: Bankman-Fried is now the richest person in the cryptocurrency sector. This is incredible when you consider that there were many wealthy investors in the space before he was even thinking about Bitcoin or cryptocurrency investing. He’s a vegan entrepreneur who also has a love for philosophy; so it’s easy to see how one might find him intriguing. 

Sam Bankman-Fried’s net worth

Sam Bankman-Fried has an impressive net worth, but the fact that he’s a crypto billionaire is only part of the story. 

Sam is only 29, but he is worth approximately $22.5 billion dollars. This story isn’t about a crypto whale putting in his life savings and betting big—it’s much different.

One of the reasons that Bankman-Fried’s accomplishments are so astonishing is because of his age. Many billionaires have been able to amass wealth over decades, but Sam went from relative obscurity to becoming an incredibly influential crypto billionaire in a matter of years. 

The Kimchi premium

For years now, Bitcoin has often been valued at a higher price in South Korea than anywhere else in the world. Many crypto traders dream about becoming a crypto billionaire, but one particular strategy allowed Bankman-Fried to make a significant amount of money. Specifically, he took advantage of the kimchi premium. This term is a reference to the traditional Korean dish.

One reason Sam is a crypto billionaire is because he was looking for opportunities like this everywhere. However, there are issues with this since it requires trading on a global scale and relying on wire transfers. Sam figured out a way to make it all happen, and he was able to scale it to the point where he was making millions of dollars.

What does Sam do?

How did a young man in his 20s who knew nothing about Bitcoin several years ago suddenly become a crypto billionaire? First, Sam knew that he wanted to take advantage of cryptocurrency arbitrage opportunities. He founded Alameda Research, a quantitative trading firm, in 2017. The firm was trading cryptocurrency consistently, up to $25 million in Bitcoin per day, by early 2018.

Sam was growing frustrated with the lack of quality crypto exchanges. He took some money from small VC firms, along with some Alameda Research profits, and founded his own exchange. The exchange, FTX, started growing significantly in terms of trading volume. 

One reason the FTX exchange became more popular was that it offered the ability to trade tokenized versions of stocks. In other words, a trader could purchase a crypto token that represented a company share (a share of Google, for example). The vast majority of his wealth comes from the fact that he founded this exchange, and he is now the richest self-made newcomer in Forbes 400 history.

Why did he get into crypto?

You might expect that a crypto billionaire becomes a “crypto evangelist,” someone who preaches about how cryptocurrency and blockchain can help with specific issues like censorship, transparency, or the pitfalls of traditional finance. 

The truth might be a bit stranger than fiction. Sam believes in the concept of “effective altruism,” meaning that he wants to get as rich as possible in order to make a big impact, down the line, by giving the money away. He got involved in crypto “when he didn’t know what trading was,” but instead saw an opportunity to make a lot of money through trading. 

Sam plans to donate the vast majority of his wealth to various charities over the course of his life. Bankman-Fried is even clear about the fact that he would do something else if he could make more money (and eventually make more of an impact) in another way.

What does Bankman-Fried think about the future?

With such an incredible track record, what does the future hold for Sam Bankman-Fried? For one, it appears as though he is stepping back from Alameda Research to focus on FTX. He’s also been getting more involved in politics, becoming a megadonor recently. 

The crypto billionaire isn’t afraid to have a controversial opinion. There has been a lot of debate about “crypto derivatives,” and whether they would make sense for a market where decentralization is valued. While many experts warn about the fact that derivatives can lead to excessive leverage, Bankman-Fried pushed back. He argued that derivatives helped with liquidity issues and that they can help offer investors “greater flexibility.” While many cryptocurrency thought leaders were excited about NFTs, Sam Bankman-Fried was—and remains—cautious.

If you’re interested in following at least ONE cryptocurrency that Sam likes, check out Solana, an Ethereum competitor. It turns out the crypto billionaire is a big fan.