Mike Novogratz says centralized crypto companies like Celsius and BlockFi have exposed the rot that decentralization in crypto sought to remove.
Cryptocurrencies are almost done with the turbulence of the massive deleveraging that has swept through the market wiping out more than $2 trillion of value, says Galaxy Digital CEO Mike Novogratz.
Speaking in a CNBC ‘Squawk Box’ interview on Thursday, the investor talked of the current market outlook as suggesting the worst of it is almost done.
However, while most of the sell-off momentum appears spent, after the “receding tide” revealed just how massively some centralized companies were leveraged, everything will need to calm down before prices begin to go higher again.
Novogratz says meantime, crypto prices might continue to hover sideways or even see fresh downsides until the Fed flinches or new capital comes into the market.
“Can we go lower? Of course we could,” he told CNBC. “It feels that we’re 90% through that deleveraging, but the problem is for you to go much higher, you need the narrative to re-pick and you need new capital to come in.”
“Can we go lower? Of course we could. It feels that we’re 90% through that deleveraging,” says @novogratz on #crypto. “The problem is for you to go much higher, you need the narrative to go much higher and you need new capital to come in.” pic.twitter.com/aoWFcorWhX
— Squawk Box (@SquawkCNBC) July 7, 2022
Novogratz blast some centralized crypto companies
Commenting on the woes facing some of the crypto companies, the Galaxy Digital CEO says he expects investigations and even prosecutions over gross misconduct.
He says decentralized companies in crypto like Compound or Aave have functioned “as they were meant to,” with transparency and such.
However, it’s centralized firms that have come in and operated opaquely, leading to all the massive leveraging and interlending that is now pushing most into bankruptcy.
“Look at Celsius for example, no one knew how much leverage they had. Or Three Arrows Capital. I think when all is said and done there will be accusations and prosecutions for fraud. There will be gross misconduct, you know, in some of these companies.”
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Ndasi Tata is a Bitcoin entrepreneur from Cameroon, who holds an M.Sc in Blockchain and Digital Currency from the University of Nicosia. He is an advocate of Bitcoin in Africa and uses various social media platforms to promote his ideas and ventures. Tata has a background in state journalism and has established himself as a significant figure in the Bitcoin community.