Billionaire investor Mike Novogratz, who once called himself the ‘Forrest Gump of bitcoin’, said the recent turmoil in the cryptocurrency industry is an outright credit crisis and predicted that bitcoin would eventually hit $500,000 in the next five years.
“I don’t think people expected the amount of damage that would be reflected in the balance sheets of professional institutions and that caused a daisy chain of events,” Novogratz said at the Bloomberg Crypto Summit on Tuesday. “It turned into a full-blown debt crisis with complete liquidation and heavy damage on confidence in the space.”
Bitcoin The $19,000-$22,000 range has struggled to escape as investors tightened monetary policy and the Celsius and teraUSD stablecoins have been bullish on losses in May. It has bounced back from the all-time high around $69,000 in November. Some enthusiasts are predicting that Bitcoin will make up for this year’s losses once the Fed’s tightening cycle is completed. The total market cap of the digital token is back at the $1 trillion level.
The founder of Galaxy Digital Holdings Ltd., which was a big promoter of TerraForm Labs, the company behind Terra and Luna, said the lesson from the stablecoin’s collapse was that both industry and retail investors really had very, very little concept. . of risk management.
TeraUSD, or UST, lost its peg to the dollar in May and, along with its digital coin counterpart, Luna, almost all of its value disappeared. This has led to what is being called a “crypto winter” with Celsius and Babel, as well as hedge fund Three Arrows Capital, dragging the industry down.
cryptocurrency The market failed to recover from the collapse of Terra in May as major crypto lending companies were under threat of bankruptcy, sparking fear among market participants.
“I don’t know what the SEC should have done, or could or could have done, but they didn’t do much to protect retail investors,” Novogratz said. He added that “the worst is over” in the crypto industry and while the current issues may have increased mistrust among retail investors, the argument for bitcoin is still strong, especially as central banks around the world fight inflation.
(with inputs from Bloomberg)
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