Mike Novogratz says it will take Bitcoin and Ethereum some time to recover
In a recent interview with Bloomberg, Mike Novogratz, CEO of Galaxy Digital, projected that Bitcoin and Ethereum will need some time to reclaim their positive narrative.
Novogratz has projected that global macro hedge funds would purchase Bitcoin if the U.S. Federal Reserve stops raising interest rates:
I believe that many conventional macro funds, which have had a terrific year, will purchase Bitcoin. We will then strengthen our position,” he stated.
Novogratz thinks that leveraged players, such as the prominent crypto hedge fund Three Arrows Capital, which has allegedly failed to pay margin calls, have worsened the latest cryptocurrency crisis.
The crypto billionaire linked the current situation to the demise of bankrupt hedge firm Long-Term Capital Management. Due to the Asian financial crisis of 1997, LTCM lost $4.6 billion in a matter of months after experiencing great success. One of the worst hedge fund failures in history was liquidated in 2000.
Novogratz expects that several businesses will file for bankruptcy
The chief executive officer of Galaxy Digital compares the price performance of cryptocurrencies to that of the video telephony software Zoom Meeting. Despite significant losses, he is certain that neither crypto nor Zoom will vanish.
“You will rebuild a pricing basis and a narrative,” Novogratz said. According to Novogratz, the U.S. economy is headed for a recession and there is no possibility of a “soft landing.”
Additionally, he feels that the association between cryptocurrencies and equities may break down in the future.