He said that “Greed, ignorance and reckless risk management” led to the fall of the cryptocurrency market, Galaxy Digital chief Mike Novogratz said in a Bloomberg interview.
The executive said that the collapse of the Terra ecosystem and the troubles at Celsius Network, Voyager Digital and Three Arrows Capital forced the entire industry to look like a “bunch of idiots.” The first episode “set off a chain of events,” no matter how banal it sounds, he added.
Galaxy Digital invested in Terra. Earlier this year Novogratz dubbed himself a “LUNAtic”, about which впоследствии пожалел. He admitted that the tattoo he got back then would be a permanent reminder that venture investing requires humility.
The takeaway from recent events is that the industry, and many retail investors, had an extremely shallow understanding of risk management, he explained.
The fallen firms went too far, driven by greed and ignorance, he said.
Three Arrows Capital kicked off the engine of a full-blown credit crisis. We suffered enormous damage to trust […] and frightened retail investors, he admitted, the CEO of Galaxy Digital.
Earlier, Novogratz named Terra USD “a big idea that failed”.
Three Arrows Capital’s debt totaled $3,5 млрд.
Prior to this, Celsius Network reported a hole in its balance sheet на $1,2 млрд.
Potential Voyager Digital obligations could amount to от $1 млрд до $10 млрд.
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