Founded at a valuation of US$3.5 billion in one and a half years, how did FTX do it? (www.blockcast.cc)

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?

The 28-year-old Sam Bankman-Fried (SBF) is the CEO of the crypto trading platform FTX. Recently, he was listed on Forbes 30 under 30 in 2021. At the same time, FTX was also promoted to a unicorn company.

In an interview with The Block recently, SBF stated that the latest valuation of FTX, a cryptocurrency trading platform established last year, has reached 3.5 billion US dollars. Up to now, FTX has raised USD 120 million.

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

The booming business has allowed FTX to rank among its competitors Deribit, OKEx and BitMEX. However, compared to the last three platforms that have been established for many years, FTX has clearly grown much faster. What is the methodology? After throwing this question to SBF, the answer he gave was to pursue the “low-hanging fruit” (easy goal) to the greatest extent.

In 2018, SBF was considering establishing a trading platform. He hoped to solve some of the practical problems of the encrypted trading platform at that time, “We can do better . “ FTX was born in May 2019. After a year and a half of development, according to The Block’s data, it is now one of the eighth largest spot and bitcoin futures trading platforms (calculated based on the total open interest).

At present, FTX has “hundreds of thousands” of users. SBF said that although FTX has not many users compared with the largest trading platform in the crypto field, its user base is already “much higher” than some similar trading platforms.

About 99% of FTX users are retail investors. SBF revealed that in terms of transaction volume, the retail market has a transaction share of more than 50%, and the rest comes from large-scale transactions conducted by institutions.

The key to getting more customers lies in launching compelling new products. SBF said that one example is the US election forecast futures contract that was launched on the platform some time ago, which has brought “a lot” of registered users to the platform. An undisclosed acquisition by FTX last year, Electionbettingodds.com, also brought many registered users to the platform.

“This is the best acquisition we have done so far.” SBF commented that in recent months, the website’s recommendation portal contributed about 5% of the platform’s transaction volume. In addition, FTX also intends to expand the supply of its forecast market, but “they are more of a long-term strategy and will still be based on a customer acquisition strategy in the short term.”

As expected, SBF is very optimistic about Serum. He said that Alameda hopes that in the near future, most of the investment projects will be built around Serum. “Some of them will be quite large…I hope they will truly open up decentralized finance.”

In August of this year, FTX acquired Blockfolio, an encryption price tracking application, for $150 million. SBF stated that they are discussing potential transactions with “a considerable number of crypto companies and non-crypto companies”. “Many conversations have progressed to stage 1.5 or other stages.” However, he declined to give specific details.

In the face of future uncertain regulation, “we can never accurately predict what will happen to regulation because this is still brewing. The world does not know the answer,” SBF added, “we have spent a lot of time and thought to study How to cooperate with regulators instead of confrontation.”