Mike Novogratz Compares Crypto Industry To ‘A Bunch of Idiots’
- Mike Novogratz said that the crypto industry looks like a “bunch of idiots”
- He said that the LUNA-UST collapse, 3AC, Celsius, and Voyager indicidents are all responsible for this disaster
Digital asset financial services and investment management firm Galaxy Digital has grabbed headlines after its CEO, Mike Novogratz, appeared in an interview with Bloomberg.
According to Novogratz, the ongoing chaos in the crypto industry, due to several factors, including the Terra blockchain and UST/LUNA disasters, bankruptcy filings by Celsius Network and Voyager, and missteps by Three Arrows Capital, has made the whole industry look like “a bunch of idiots.”
On July 19, while talking with Bloomberg, the 57-year-old American billionaire investor said that he doesn’t want to say “I told you so,” but he believes that the LUNA crash was actually “very transparent.” He believes that the incident created a massive panic and led to a “daisy chain of events,” resulting in the downfall of other players in the crypto industry.
The CEO, who has previously called himself a “Lunatic”—a term formerly used to describe fans of LUNA, and even has a Luna tattoo on his arm—has himself ironically invested in Do Kwon’s Terra Blockchain on behalf of Galaxy Digital in 2020.
While in May, he said his LUNA tattoo “will be a constant reminder that venture investing requires humility,” now, he believes that most investors should have seen it coming.
“People knew, if they paid attention, the bet they were making. The bet turned out not to work, and it unraveled very quickly. If there’s a lesson learned, [it] was that the industry, plenty of retail investors, really had very, very little concept of risk management.”
he stated.
In June, while speaking at Piper Sandler Global Exchange & Brokerage Conference, Novogratz predicted that two-thirds of crypto-focused hedge funds could go extinct, although he showed optimism about crypto adoption expansion and its application in the real world.
Moreover, Novogratz also added that many now-troubled crypto firms like Celsius Network had “inane” risk management, and they overleveraged themselves and eventually listed bankruptcy.
He commented on the bankrupt companies’ strategies stating its greed and ignorance.
The CEO blamed a large portion of the industry’s problems on Three Arrows Capital, which, according to court filings, owes its debtors an enormous $3.5 billion.
“The Three Arrows situation—which we’ll see, you know, if it was legitimate or if there was fraud involved—really started that flywheel of credit losses. It turned into a full-fledged credit crisis.”
said the CEO.
The latest turmoil in the cryptocurrency business is a “full-fledged credit crisis,” according to Novogratz, who previously referred to himself as the “Forrest Gump of Bitcoin.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
