It's an early May to forget for crypto billionaires.
In a few days they saw their efforts reduced to nothing.
For years they fought to convince the general public and the authorities that bitcoin and cryptocurrencies as a whole had a purpose.
The argument most often put forward is that crypto allows the communities that are often excluded from the traditional financial system to finally have equal access.
Basically, with crypto, an investor's color, ethnicity, country or gender do not matter.
In addition, crypto makes it possible to eliminate intermediaries and offers an access to finance for all.
Recently, after years of resistance, regulators across the world have started to embrace crypto. Even President Joe Biden has issued an executive order asking federal agencies not to stifle innovation.
But the progress made could take a big hit from the current crypto market rout.
While cryptocurrency prices are suffering from general growth concerns, how stable the crypto sphere is has also been affecting prices.
Now, all eyes are on the disaster of the very controversial stablecoin UST or TerraUSD and its sister token Luna.
The two coins that belong to the Terra ecosystem have collapsed in a just few days. causing colossal losses to investors and dealing a massive blow to the idea of crypto as a safe investment.
Rug Pull scams are the words that accompanied their descent into hell.
Indeed, until April 5 Luna was still worth $119.18 but at the time of writing its value was $0.00001826.
The token and UST were delisted by crypto exchanges Binance and OKX in an effort to protect their customers.
To summarize, UST and Luna did not resist the massive withdrawals of assets from their holders, even though UST was supposed to have reserves since it was pegged to the dollar.
Without going so far as to speak of a scam, the collapse of the two coins shows the fragility of certain crypto projects.
The impact on the whole market is huge, especially on bitcoin, after the Luna foundation sold bitcoins in an attempt to meet the sales of UST.
Bitcoin prices are currently trading around $30,000 but had fallen as low as $28,000 on May 12, the lowest since December 2020.
The credibility of the crypto market as a whole has taken a hit.
Binance's Founder Has Lost $84.3 Billion Since January
Besides retail investors, crypto billionaires have also lost colossal fortunes on paper, according to Bloomberg Billionaire Index.
The biggest fall concerns Changpeng "CZ" Zhao, the founder of Binance, the largest cryptocurrency exchange by trading volumes.
In January, his net wealth was valued at $96 billion in the wake of record high crypto prices and crypto buzz.
This fortune was valued at $11.5 billion as of May 12, according to Bloomberg Billionaires Index. He lost $84.3 billion in a few months.
Sam Bankman-Fried, the founder of FTX.com, another crypto exchange, has seen his net wealth shrink by $5.2 billion since the start of the year.
His fortune is estimated at $11 billion.
The fortune of Brian Armstrong, CEO and co-founder of Coinbase (COIN) , the largest U.S. crypto exchange platform, has also melted.
Armstrong owns 19% of Coinbase.
However, Coinbase shares have fallen nearly 73% since the start of the year.
Armstrong's net worth is currently valued at $2.2 billion, down from $8 billion in March.
The brothers Tyler and Cameron Winklevoss, founders of the crypto trading platform Gemini, have each lost $2 billion, at $3.6 billion each.
Finally, former banker and billionaire Mike Novogratz saw his fortune melt from $8.5 billion on paper to $2.5 billion. Novogratz is an interesting case.
Galaxy Digital, his company invests in bitcoin, but Novogratz is himself a fan of controversial UST or TerraUSD, the stablecoin which has just collapsed.
"I’m probably the only guy in the world that’s got both a bitcoin tattoo and a Luna tattoo,” the former banker said at the last Bitcoin 2022 conference in Miami.