Billionaire Sam Bankman-Fried is the chief executive of bitcoin and crypto exchange FTX.

Speaking on an interview with CNN, Bankman-Fried made some sobering comments on the state of the cryptocurrencies market, which is currently getting some much-needed love from investors. Bitcoin the leading cryptocurrency, is trading at $21,690.03, up over 3% in 24 hours, and gaining nearly 24% from its recent, 52-week low of $17,614.34. (Forbes)

What’s more, several analysts and crypto luminaries have called a bottom for bitcoin and laid out a rosy and bullish outlook in the future, despite others calling these assets a giant Ponzi scheme – the biggest in human history.

However, Bankman-Fried warned on the CNN interview that “a substantial fraction” of cryptocurrencies are “empty products” with “real crash potential.”

Hidden pitfalls in the crypto ecosystem

“When you have something that’s basically an empty product, which is true of some places and assets in crypto, that is something that certainly has real crash potential,” Bankman-Fried told CNN.

“By market cap or volume, a pretty small fraction of the crypto eco-system represents this; however, by number of assets, it’s a substantial fraction.”

Among crypto assets, he said that there was “this deeper core that has much more usage” and “at least a reasonable sense of real future use.”

Unfortunately, “the general pattern is of a long tail of assets that has very little usage and is primarily just speculation.”

He reiterated his views from a previous Bloomberg interview regarding the Ponzi-like nature of many crypto tokens.

“Many of these things are basically purely economic speculation with no real use case potential,” said Bankman-Fried. “It’s not always obvious which is which.”

“We can do what we can to try to distinguish them and offer assets that are healthy for the ecosystem but we’re not going to be perfect at that, no one will.”

Indeed, a reference to the top crypto losers over a 30-day period on CoinMarketCap shows many that have lost nearly 100% of their value.

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