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Venture capital interest in crypto ‘not slowing at all’: FTX US president

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FTX US president Brett Harrison joins Yahoo Finance Live to the crypto exchange's $8B valuation, venture capital interest, and growth in the NFT space.

Video transcript

- Welcome back to "Yahoo Finance Live," everyone. After building a base of 1.2 million users, crypto exchange FTX US, they've also amassed an $8 billion valuation and gained partnerships across the likes of the Golden State Warriors. They've also got the MLB and the Washington Wizards along the way, just to name a few.

Joining us now, we've got Brett Harrison, FTX US president. Brett, great to have you here on the day with us, and thanks for taking the time. $400 million raised even as crypto has slipped about 45% from some of its all-time highs. So perhaps the best place to start is exactly what this funding will be put to use towards.

BRETT HARRISON: Sure. So yeah, this was our first public fund raise as a company. We're very excited and thankful for our investors for joining us on this incredible journey of growth that we've had in the past year that we've started in operation, and we're very excited about a lot of things that we have in store for 2022.

One of the biggest things is our derivatives platform. We acquired LedgerX, now FTX US Derivatives, last year hoping to be able to offer crypto derivatives to retail and institutional customers in 2022. And part of the funds will be able to bolster that effort in order to integrate that platform with our spot platform and offer an integrated experience to our customers.

We're also always on the lookout for potential strategic acquisitions, whether those be cases where we can obtain different kinds of licenses to allow us to get into new businesses, as we have done with the derivatives business, or there could be customer-acquisition plays like we did with Blockfolio where there could be large existing applications out there with user bases who want to be able to get into crypto, and we can provide the backend services for that application. So there's a couple different ways that we can potentially employ these funds in the future.

AKIKO FUJITA: You've got some big-name investors in this round here, SoftBank and Temasek leading the way. And when you look at the overall crypto space, $30 billion poured into the space from VCs last year. How much of that momentum do you think can be continued, and what are you seeing in terms of the interest coming in from venture capital?

BRETT HARRISON: There seems to be no signs of venture-capital money coming into crypto slowing at all. Even in spite of the current [INAUDIBLE] in crypto [INAUDIBLE] with the sort of depression in global equity markets and futures markets as a whole as well. People are investing in the technology and the entrepreneurs that are building in this space, that's not slowing down at all.

And I think this is a very positive sign for what is to come, that people are putting their heads down. They're building. They're creating in spite of what's happening with the current market volatility. And we're just seeing just continued interest, whether it be in new ways of disrupting existing financial technologies, ways of integrating things like NFTs into blockchain-based gaming, and more. And so we're very excited to potentially partner with many of these companies looking to get into the crypto space and continuing to see excellent interest from investors all across the crypto landscape.

- Apart from the derivatives exchange that you acquired in October, you've also launched an NFT platform. You know, the pricing and the relationship between the price of crypto and NFTs, it's still confusing for some. So can you help us break that down a little bit more and perhaps detangle the two, especially given the correlation between both?

BRETT HARRISON: Sure. The NFT market is very young, and it's very difficult to predict how the relationship will form between crypto asset prices, especially the prices of the underlying protocol tokens that these NFTs are on, and the NFTs themselves.

If you think about these objects as, you know, collectibles or pieces of art, you might think that their intrinsic value comes ultimately from their dollar price, but it seems that the people who are trading and investing NFTs are actually thinking about these in terms of their underlying protocol. So if Ethereum-- if, on the Ethereum blockchain, the ether token is going up, generally speaking, it looks like the prices of NFTs go up along with it. I think that is because people think that, as the prices move up, people have more confidence in the protocol and they're more excited about the applications being built on it, the potential opportunities for new applications to be built using that NFT technology.

But we're seeing also that as prices continue to go down further in the crypto markets, sometimes the prices of NFTs have sort of an anticorrelated effect with them. It's very difficult to tell where things are heading right now with so little liquidity in the NFT market, and we're going to have to see a lot more maturation in the space before we understand more.

AKIKO FUJITA: Yeah, just another layer to watch here pointing to further growth in this space. Brett, it's good to have you on today. Brett Harrison, FTX US president.

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