Billionaire Mike Novogratz says the crypto market will continue to consolidate for months to come - but urges investors to hold

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Billionaire Mike Novogratz says the crypto market will continue to consolidate for months to come - but urges investors to hold
Photo by John Lamparski/Getty Images
  • Billionaire Mike Novogratz on Wednesday encouraged crypto investors to hold their ground despite a sharp sell-off.
  • The Galaxy CEO posted a two-and-a-half-minute video explaining how volatile price swings are normal.
  • He also encouraged investors to buy during the dip.
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On Wednesday, at the depths of a seven-day sell-off that wiped out nearly 50% of cryptocurrency market valuation, billionaire Mike Novogratz gave investors his advice: "Hold your ground."

In a two-and-a-half-minute video released by his firm, Galaxy Digital, the founder and CEO said that volatility is normal.

"The market is now going to consolidate for weeks, if not a couple of months, as it rebuilds confidence," Novogratz said.

He said the "giant liquidation" was a confluence of multiple factors - from the recent lapse of the tax deadline, which qualified some cryptocurrency holdings into long-term capital gains, to Elon Musk "poking the bear" with his comments over bitcoin's harmful environmental impact.

"We're not going to put Humpty Dumpty back together again in a week," said Novogratz. "But I want to stress loud and clear that the underlying progress that's happening in both the bitcoin ecosystem, Ethereum ecosystem, in much of the crypto ecosystem is full speed ahead."

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The Galaxy chief also stressed that the value of cryptocurrency is the technology that is going to revolutionize how people transmit value to each other - in insurance, in derivatives, in banks.

"The great decentralized revolution is alive and strong. It's taken a price hit," Novogratz said. "Crypto suffered these washouts before and always came back strong."

John Wu - the president of Ava Labs, the team behind altcoin Avalance - was similarly unsurprised by the downturn.

"Generally when there's a lot of volumes, that's a sign of people clearing out," he told Insider. "That's why I think, there will be some stabilization."

The market cap for global digital currencies slid as low as $1.35 trillion on Wednesday, down 47% from a recent peak of $2.56 trillion on May 12, according to data from CoinMarketCap.com.

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Read more: 'Wolf of All Streets' crypto trader Scott Melker breaks down his strategy for making money using 'HODLing' and 100X trade opportunities - and shares 5 under-the-radar tokens he thinks could explode

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