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As we examine Sam Bankman-Fried’s net worth, let’s take a look at his biography, investor profile, and rise to riches. Sam Bankman-Fried came into the spotlight in late 2022 for the collapse and bankruptcy of the crypto exchange FTX.
Sam Bankman-Fried founded the crypto derivatives exchange FTX in 2019, and by 2021 he had become a multi-billionaire. In July 2022, Forbes ranked Sam Bankman-Fried as having a net worth of $17.2 billion.
At one point he was even worth $26 billion according to some estimates. All that changed extremely quickly in November 2022, when FTX and affiliate companies all filed for bankruptcy on the same day. Reassessments have had to be made to establish a figure for Sam Bankman-Fried net worth.
Below we have provided our best estimate of Sam Bankman-Fried’s net worth. Note that estimates are precisely that and are not necessarily conclusive. With the help of publicly available assessments, we can determine a figure that is likely to be representative of Sam Bankman-Fried’s net worth.
Given the volatility of the crypto industry, and Bankman-Fried’s assets in particular, his net worth is subject to rapid and sudden change. We will periodically update this article to reflect the latest estimate of Bankman-Fried’s actual net worth.
|Date of Birth||March 6, 1992|
|Companies Founded||FTX Exchange & Alameda Research|
|Best Known For||Founding & Bankrupting FTX Exchange|
|Net Worth||$991 million|
What Is Sam Bankman-Fried Net Worth?
By most estimates we have assessed and based on recent estimates before the debacle of FTX, Sam Bankman-Fried net worth is $991 million. Bankman-Fried is famous for having founded and led the crypto derivative exchange FTX. He is also well known for his political lobbying.
Previously to FTX’s collapse Sam Bankman-Fried had been involved in bailing out various crypto firms. Which might have been an act of altruism or more a wider-looking concern to save the crypto market.
However, despite the multi-billion valuation of his net worth only a few months ago, Sam Bankman-Fried is still estimated to have a considerable fortune. Although that may be a consolation for some, for others it may also seem like a major setback.
Sam Bankman-Fried Biography
Sam Bankman-Fried was born in Stanford, California on March 6, 1992. He attended high school in Hillsborough, California, and then attended the Massachusetts Institute of Technology from 2010 to 2014. At MIT Bankman-Fried graduated with a major in Physics and a minor in Mathematics.
In 2013, Bankman-Fried started working as an intern for Jane Street Capital, a proprietary trading firm. After graduating he returned to the company full-time. His tenure at Jane Street Capital ended in September 2017, when he moved to Berkeley to join the Centre for Effective Altruism as the director of development.
In November of that year, he joined forces with Tara Aulay from the Centre for Effective Altruism to set up Alameda research, a quantitative trading firm. Reports from Yahoo Finance in July 2021 gave Bankman-Fried ownership of around 90 percent of Alameda Research.
At that time, Alameda had $10 billion of crypto coins on its balance sheets. Bankman-Fried took advantage of an arbitrage opportunity in the price difference for Bitcoin between the Japanese market and the American market.
He saw that Bitcoin was trading at a premium in Japan compared to its price in the United States. Through Alameda Research, Bankman-Fried moved up to $25 million a day to exploit this price discrepancy.
In 2018, Bankman-Fried moved to Hong Kong after attending a cryptocurrency conference in Macau. By April 2019, he had founded the crypto derivatives exchange FTX, which launched in May of that year. Bankman-Fried later moved the base of his operations away from Hong Kong and established FTX’s base in the Bahamas.
How Did Sam Bankman-Fried Build His Wealth?
Sam Bankman-Fried built his fortune mainly through two businesses, Alameda Research and FTX. Although he has also made investments in other activities, such as Sequoia Capital and Robinhood Markets. FTX not only offered derivatives trading in cryptocurrency but also tokenized stocks and NFTs.
The exchange had also launched its own utility token known as FTT, which by the start of 2022 had increased in value by 850 percent. In August 2020, FTX bought the retail crypto trading app Blockfolio. This acquisition allowed the new exchange to reach a multitude of mobile users and traders of crypto.
Overall, by 2021, FTX had over one million users on its desktop and mobile platforms. The company reached its peak evaluation in the same year at $18 billion. In 2021, FTX also reported revenue of $1.02 billion, a massive jump compared to the revenue reported for 2020 of $85 million.
In 2021, the peak 24-hour trading volume for FTX was $21 billion, while in 2020 the full-year trading volume was $385 billion. We can see that the revenue jump is in line with the increase in trading volume. At its peak, his fortune was estimated at $26 billion.
Commissions charged on trading volume by the exchange were a substantial proportion of the revenue. The trading volume was also helped by the fact that FTX offered large amounts of leverage to its traders. Leverage of up to 20 times the margin amount was available to qualified traders.
Reports recently estimated that Sam Bankman-Fried lost around 95 percent of the value of his net worth.
How Is Sam Bankman-Fried Net Worth Calculated?
Sam Bankman-Fried net worth is calculated using publicly available data. And given the recent events, recalibrating that data to reflect the consequences of the bankruptcies of FTX and Alameda Research.
Most of his wealth before the meltdown of FTX came from his holdings in the exchange and Alameda Research. However, recent events of filing for bankruptcy have put the evaluations of those two companies at $1 each.
However, his stake in Robinhood Markets is still worth a hefty fortune. In May 2022, Bankman-Fried revealed he had bought a 7.6% stake in the trading app. The company at the time of writing is worth $9.32, giving his shares in the company a value of $541 million.
Another asset Sam Bankman-Fried’s net worth is based on is the FTT token. Although the token lost 80 percent of its value when Binance owner tweeted that the company would be selling all of its stake in the token.
The US company of FTX, FTX.US, is not involved in the collapse of the international exchange FTX. FTX.US was valued at $8 billion in a fund-raising round in January 2022. It has lost value as have all crypto exchanges due to the decline in the value of the crypto market overall.
Considering the loss in value of crypto, FTX.US may now be worth around $2 billion. And Sam Bankman-Fried probably has a large share of the company. So, we find the estimate of Sam Bankman-Fried’s net worth of $991 million to be accurate.
Sam Bankman-Fried’s Investment Style
From what we can discern from the latest news Sam Bankman-Fried had a high appetite for risk and a willingness to break the rules. Although he has a highly quantitative background in mathematics and physics, he seems to have made an excessively large bet on Alameda Research.
All quantitative traders know that each trade only consumes a minimal percentage of available risk. And that through the repetition of multiple trades with small risk profiles you build an attractive return on investment.
However, Sam Bankman-Fried seems to have ignored this principle. One that he presumably founded Alameda Research on and used to drive the business model for the derivative exchange FTX. It may be that Bankman-Fried became overconfident and took on much greater risk than would have been acceptable.
In any case, he seems to be flying through a major storm right now. He is under investigation by the Bahamian authorities on his alleged securities fraud for siphoning billions of FTX investors’ money to Alameda for trading purposes.
Sam Bankman-Fried’s View on Alternative Assets
No need to mention here that Sam Bankman-Fried is a stern believer in alternative assets, given his high-profile role in the development of one the biggest crypto derivatives exchanges in the world. He invested his full time and commitment to the crypto industry.
We have not found any publicly available information on Sam Bankman-Fried’s views on other alternative assets such as precious metals or real estate. However, you think he might be open now to investments of the kind that prove to be more stable.
Perhaps a figure like Sam Bankman-Fried is more likely to still choose an asset that may appreciate in value multiple times very quickly or lose 80 percent of its value just as quickly. Given his speculative nature, it’s hard to imagine he would consider assets with such low-risk profiles.
Who Else Invests Like Sam Bankman-Fried?
Not all investors have the same investing style. To compare investors like Sam Bankman-Fried you can check out some of the profiles listed below:
- Barbara Corcoran
- Chris Dixon
- George Gammon
- Lori Greiner
- Robert Herjavec
- Daymond Garfield John
- Katrina Lake
Want to Invest Like Sam Bankman-Fried?
We wouldn’t recommend it, but if you wanted to invest like Sam Bankman-Fried you would need to make investments that consume large amounts of your capital in one single trade. To us, that seems like a recipe for disaster. Instead, perhaps diversification is our best ally.You can implement a diversification strategy and take advantage of tax advantages by opening a Self-Directed IRA today. Apart from enjoying tax-deferred growth with this type of IRA, you will also be able to hold gold or cryptocurrencies.