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Key takeaways:
- Galaxy Digital’s Mike Novogratz has mentioned that two-thirds of crypto hedge funds will fail.
- Mr. Novogratz cited the continuing world macroeconomic setting because the core purpose 66% of crypto hedge funds will exit of enterprise.
- He additionally identified that the current market sell-off on account of UST’s collapse is a further issue towards crypto hedge funds closing store.
Galaxy Digital’s founder and CEO, Mike Novogratz, has forecasted a tough street forward for crypto hedge funds. In line with Mr. Novogratz, two-thirds of the present hedge funds invested within the cryptocurrency business will fail as a result of ongoing Bitcoin and crypto bear market.
He spoke on the Piper Sandler World Change and Brokerage Convention on Wednesday, the place he defined that of the estimated 1,900 crypto hedge funds, 66% would exit of enterprise. He mentioned:
Quantity will go down, hedge funds should restructure.
There are actually 1,900 crypto hedge funds. My guess is two-thirds will exit of enterprise.
Mr. Novogratz additional defined that the crypto hedge funds’ potential collapse can be as a result of broader macroeconomic setting starting with the US Federal Reserve withdrawing its intervention in stimulating the financial system. Moreover, final month’s collapse of TerraUSD (UST) and Terra (LUNA) has utilized extra promoting stress to the crypto markets.
UST, LUNA Not Sturdy Sufficient To Deal with a Bitcoin Market Downturn.
Regarding UST and LUNA, Mike Novogratz defined that the mission was not robust sufficient to deal with the results of a Bitcoin bear market. He defined:
It wasn’t robust sufficient to cope with the headwinds of Bitcoin costs taking place, crypto costs taking place. It was a catastrophic loss.
The CEO was unbelievably vibrant and charismatic and there was an incredible quantity of momentum behind what he was doing.
Galaxy Digital Will Proceed to Rent Individuals.
He additionally highlighted that Galaxy Digital would proceed to rent vibrant minds regardless of the continuing Bitcoin and Crypto bear market.
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