Sam Bankman-Fried’s fraud leaves lasting impact on crypto market

Cryptocurrency continues to be a hot topic among investors, with its volatile nature and evolving regulatory landscape often causing concern. Roundtable host Rob Nelson, Bitcoin Bros. Co-Host Aaron Williams, and Formidium Co-Founder and Chief Growth Officer Shalin Madan delve into these topics, offering insights and advice for those interested in the crypto world.

Nelson opened the discussion by emphasizing the distinction between Sam Bankman-Fried’s scam and the intrinsic value of cryptocurrencies. “We will continue to pay the price for Sam Bankman-Fried’s sins,” Nelson stated. He made it clear that the fraudulent activity associated with Bankman-Fried was not specific to cryptocurrency itself. Rather, it was a clear case of fraud occurring in the crypto space.

Williams echoed this sentiment, advising investors to ignore the noise surrounding regulatory fears. “Regulation in the United States is still on a positive path,” Williams said, highlighting the growing regulatory interest in crypto over the past five years. He assured that Bitcoin, along with other major cryptocurrencies, will withstand these regulatory challenges regardless of the short-term impacts.

Nelson then shifted the conversation to bitcoin’s volatility, noting that while bitcoin can rise and fall rapidly, institutional investors are attuned to these swings. “Bitcoin isn’t going anywhere,” he argued. The real challenge is how retail investors perceive and respond to these swings. Shalin Madan offered an institutional perspective on managing this volatility.

Madan noted that bitcoin is now less volatile than it was a few years ago, a sign of its maturation as an asset. He stressed that understanding and measuring volatility is crucial to managing investments. “If something is very volatile, you size it down, but that doesn’t mean you don’t have any positions in your portfolio,” Madan explained.

He also made comparisons between cryptocurrencies and traditional assets, noting that despite their high volatility, cryptocurrencies are measurable and can be incorporated into investment portfolios. This measurable nature makes them more predictable than illiquid assets like real estate, whose value can remain uncertain for years.