The CEO of Galaxy Digital, Mike Novogratz, stated that current trends in the cryptocurrency market are not of concern as long as Bitcoin remains above $40,000. In his interview with CNBC, the optimistic investor allayed fears arising from the latest market selloff.
Reason for market liquidity
Remember that there was a massive sale across the entire cryptocurrency market. Many cryptocurrencies dropped to their lowest levels in more than a month. The sale was triggered by widespread concerns about the debt crisis at Chinese real estate giant Evergrande.
Evergrande’s $300 billion debt crisis, it was feared, would affect other asset classes. This resulted in traditional market turmoil, with global equities falling widely. Dow futures also dropped more than 300 points.
The market’s downtrend resulted in Bitcoin falling by around 8% and Ethereum by around 10%. Other currencies like Solana and Cardano also dropped significantly. The trend dragged the market capitalization of cryptocurrencies to $1.9 trillion.
Price drop is healthy for the system, says Novogratz
Novogratz argues that falling prices are healthy for the system, as the market has spent several months at a high. Novogratz said:
I think the market took a little too long – the news from China scared people
The investor also said he believed that the SEC’s regulatory crackdown on cryptocurrency was also a contributing factor to the liquidation. He, however, opined that as long as Bitcoin value stayed at $40,000 and Ethereum didn’t drop below $2,800, the market would be in good shape.
In an overview of market action, Novogratz stated that there is still a growing interest from investors, both retail and institutional, for digital assets.
I don’t see anything but engagement and activity from our investor and corporate clients. The inquiry level, the business level did not go up
On decoupling from other markets and value
On whether cryptocurrency should decouple from the broader financial market, Novogratz argued that the other assets in the market provided better protection against what could be the volatility of digital assets. As such, he argued that it will take some time for such disassociation to take place.
He also commented on the debate over the value of Bitcoin, which has been the subject of speeches recently. While some claim that Bitcoin has inherent value, others like Ray Dalio of Bridgewater Associates argue that everything Bitcoin has is perceived value.
In his response, Novogratz stated that entering into philosophical debates about what value was not necessary for him. He said:
A Matisse painting can top $100 million because a small amount of people decide it’s worth $100 million. More than 150 million people around the world have decided that Bitcoin is worth something. That’s enough for me.