How did FTX achieve a valuation of US$3.5 billion in one and a half years after its establishment?

Source: The Block

Original author: Yogita Khatri

Rhythm Blockbeats Note: Since its establishment in 2019, the growth rate of the cryptocurrency trading platform FTX is obvious to all. Recently, FTX founder and Serum consultant SBF revealed in an interview that the latest valuation of FTX has reached 3.5 billion U.S. dollars, and FTX’s profit this year will reach 70 million U.S. dollars. How did FTX achieve such impressive results in just one and a half years?

28-year-old Sam Bankman-Fried (SBF) is the chief executive of the encrypted trading platform FTX Officer, he was recently featured on the Forbes 2021 30 Under 30 rich list At the same time, FTX was also promoted to a unicorn company.

Recently, SBF said in an interview with The Block that the latest valuation of FTX, an encrypted trading platform established last year The value has reached 3.5 billion U.S. dollars (Note: According to Rhythm’s previous reports, FTX was valued at 1 billion U.S. dollars in February this year ). So far, FTX has raised $120 million.

Today, FTX is already profitable. According to SBF’s forecast, by the end of this year, the platform’s revenue will reach 80 million US dollars, and the profit will reach $70 million.

Booming business puts FTX in the same league as rivals Deribit, OKEx and BitMEX, though, compared to already The latter three platforms have been established for many years, and the growth rate of FTX is obviously much faster. What is the methodology? After throwing this question to SBF, the answer he gave was to pursue the "low-hanging fruit" (easy-to-achieve goals) to the greatest extent.

In 2018, SBF was considering the establishment of a trading platform, and he hoped to solve some practical problems existing in encrypted trading platforms at that time problem, "We can do better". FTX was born in May 2019, and after a year and a half of development, it is now one of the eighth largest spot and bitcoin futures trading platforms (by total open interest), according to The Block.

Currently, FTX has "hundreds of thousands" of users, SBF said, despite a tie-up with the largest trading platform in the crypto space In comparison, FTX does not have many users, but such a user base is already "much higher" than some similar trading platforms.

Approximately 99% of FTX users are retail investors. SBF revealed that in terms of transaction volume, the retail market accounted for more than 50% of transactions, while the rest came from large-scale transactions conducted by institutions.

The key to getting more customers is launching attractive Eye-catching new products. SBF said that one example is the US election prediction futures contract launched by the platform some time ago, which brought "a lot" of registered users to the platform. And FTX made an undisclosed acquisition last year: Electionbettingodds.com, which also brought many registered users to the platform.

“This is by far the best acquisition we have ever made.” SBF commented that in recent months, the website’s recommended entry has contributed about 5% of the platform’s transaction volume. In addition, FTX also intends to expand the supply of its prediction market, but "they are more of a long-term strategy, and in the short term it will be based on a customer acquisition strategy."

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As expected, SBF is very bullish on Serum. Alameda hopes that in the near future, most of its investments will be built around Serum, he said. "Some of them are going to be pretty massive...I hope they're going to really unlock decentralized finance."

This year 8 In September, FTX acquired crypto price tracking app Blockfolio for $150 million. SBF said they are in discussions with a “substantial number of crypto and non-crypto companies” about potential deals, and that “many conversations have progressed to stage 1.5 or otherwise.” However, he declined to give specifics.

Facing future regulation with uncertainty, “We can never predict exactly what will happen with regulation because it It’s still in the works. The world doesn’t know the answers,” SBF added, “and we’ve spent a lot of time and thought on how to work with regulators, not against them.”

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