According to Mike Novogratz, founder and CEO of Galaxy Digital, the current market downturn will cause two-thirds of hedge funds investing in cryptocurrencies to fail. On June 8, Mike said the following at the Piper Sandler conference.
Mike Novogratz stated the following:
“Volume will fall, forcing hedge funds to restructure. There are over 1,900 cryptocurrency hedge funds. My prediction is that two-thirds will go out of business.”
A former Fortress Investment Group hedge fund manager said the recent decline in token prices was due to the financial market’s reaction to the Fed’s removal of the stimulus. Novogratz also blamed the collapse of the Terra blockchain last month due to broader economic factors rather than errors in the project.
Terra USD (UST) was the third most popular stablecoin among crypto hedge funds tested in April 2022, just before the fall of Terra, according to PwC’s annual crypto hedge fund report. In addition, 49% of PwC survey respondents traded the corresponding Luna token, which Novogratz made immortal with his now-famous tattoo.
Despite this, the Galaxy will continue to grow during the downturn, in contrast to competitors like Gemini Trust Co., who are firing workers to survive the bear market, according to Novogratz. According to crypto billionaires, once the downturn is over, the New York-based crypto brokerage firm and asset-management firm want to be the “go-to destination.”
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