Billionaire Predicts Most Crypto Hedge Funds Will Become BankruptJune 12, 2022
Recently, the crypto market has been on a tough run moving upwards and downwards. Daily, the crypto community witnesses the rise and fall of several currencies.
Also, some analysts believe that hedge fund companies will record significant losses. This is because most had invested in digital assets when the market was booming.
Two-thirds of Crypto Hedge Funds To Go Bankrupt
According to Bloomberg, the CEO of Galaxy Digital, Mike Novogratz, made a report on cryptocurrency. The CEO noted that major hedge funds that invested in crypto would fail. This is due to the present decline in the cryptocurrency market.
Speaking at a meeting in New York, Novogratz added that;
“Volume will drop and hedge fund companies will need to restructure. Presently, we have 1,900 cryptocurrency hedge funds. I believe two-third of them will become bankrupt.”
Additionally, the CEO believes the stimulus withdrawal by the US reserve affected the crypto market. He believes the crypto market is only reacting to the pullback in fear of inflation.
According to Finbold, the billionaire thinks there is a correlation between crypto and NASDAQ. However, he believes this correlation will not stand the test of time.
Novogratz Reacts To The Fall Of Terra
Several individuals began throwing jabs at the billionaire after the fall of Terra’s (LUNA) ecosystem. Right from the onset, Novogratz has been an ardent supporter of LUNA. He even went ahead to draw a tattoo of the token on his left arm.
As stated by Novogratz, his company, Galaxy Digital, bought LUNA in 2020. Several reports believe Galaxy Digital lost a huge amount of money. Hence, it was understandable why he went silent after the collapse.
When the Terra ecosystem collapsed, the billionaire’s Twitter account was inactive for days. Users were afraid something might have happened to the billionaire.
Charles Hoskinson, the founder of Cardano, is among those who laughed at the billionaire. He tweeted a product that Novogratz can use to remove his LUNA tattoo.
However, the entrepreneur reacted to the crisis later on. Although his company lost funds, he noted they still have enough to keep operating.
According to him, the impact of the fall is great and can take months to estimate. He referred to Terra as a failed idea. Also, he believes that Terra’s collapse will affect the confidence people have in crypto.
Meanwhile, Novogratz remains bullish about crypto and believes it has come to stay. Also, he warned investors to be careful while trading. The crypto market might take a long time to go back to normal.