The CEO of cryptocurrency investment company Galaxy Digital believes that amid the high volatility of the cryptocurrency market, many large investment funds will close.
Former hedge fund manager Mike Novogratz, speaking at the Piper Sandler Global Exchanges & Brokerage Conference in New York, declaredthat most hedge funds investing in cryptocurrencies will fail due to the current digital asset market crash:
“Volume will fall and hedge funds will have to restructure. My guess is that out of 1,900 large cryptocurrency hedge funds, two-thirds will fail.”
The continued drop in the price of cryptocurrencies over the past six months can be explained by the market reaction to the removal of incentives by the US Federal Reserve (Fed), Novogratz believes.
The businessman explained the collapse of the Terra blockchain, in which he and Galaxy Digital had previously invested, by macroeconomic factors, but not by the shortcomings of the project:
“The project was not strong enough to cope with the headwind of falling prices for bitcoins and altcoins. It was a catastrophic loss for the market. The CEO was incredibly smart and charismatic, and there was tremendous momentum behind what he did.”
Crypto hedge fund PwC’s annual report revealed that Terra USD (UST) was the third most popular stablecoin among crypto hedge funds from April 2022 until the default. Among respondents surveyed by PwC, 49% traded in the LUNA affiliate token, which Novogratz immortalized with his infamous tattoo.
Source: Bits
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