Mike Novogratz says centralized crypto companies like Celsius and BlockFi have exposed the rot that decentralization in crypto sought to remove.
Cryptocurrencies are almost over with the massive deleveraging turmoil that swept the market, wiping out more than $2 trillion in 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 selling momentum appears to have been exhausted, after the “ebb tide” revealed how massively exploited some centralized businesses have been, all will need to subside before prices begin to rise 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 like we’re 90% through this deleveraging, but the problem is you’re going a lot higher, you need the narrative to pick up and you need new capital to come in..”
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 crypto companies like Compound or Aave have worked “the way they were supposed 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 Capital Arrows. I think ultimately there will be charges and prosecutions for fraud. There will be serious misconduct, you know, in some of these companies.”
