Mike Novogratz, the wealthy CEO of crypto investment firm Galaxy Digital, began by discussing the recent crisis in the Terra blockchain ecosystem, which saw both the LUNA token and the algorithmic stablecoin UST experience market collapse.
Novogratz’s shareholder letter comes only days after Galaxy provided an update on its financial situation. Galaxy was an early sponsor of Terraform Labs, the Terra blockchain developer, having participated in a $25 million fundraising round disclosed in January 2021.
Novogratz wrote the following:
“What happened in the markets and the Terra ecosystem is bad news. In just a few hours, the market value of Luna and UST plummeted by $40 billion. Profits and wealth vanished for both large and small investors. The crash shattered trust in crypto and DeFi. When money is lost in such a dramatic way, people demand explanations. “
Novogratz continued, adding that Galaxy was drawn to invest because of the concentration on payments.
In the latter, he argued that last week’s market event occurred in a “brutal” macroeconomic climate, citing a drop in global asset values since the start of 2022, a highly inflationary environment, and central bank operations to unwind “a gigantic liquidity bubble.”
Novogratz wrapped up the message by emphasising Galaxy’s financial soundness and his faith in the ecosystem as a whole.
Read more: Legal team at Terraform Labs quits after UST collapse
