(Bloomberg) — Michael Novogratz, the billionaire cryptocurrency investor who leads Galaxy Digital Holdings Ltd., said he expects the digital-asset market to be “volatile and difficult” for at least the next few quarters as it remains tied to moves in U.S. equities.
“Crypto probably trades correlated to the Nasdaq until we hit a new equilibrium,” Novogratz said on Galaxy’s first-quarter earnings call on Monday. “My instinct is there’s some more damage to be done, and that will trade in a very choppy, volatile and difficult market for at least the next few quarters before people are getting some sense that we’re at an equilibrium.”
He repeated his call that Bitcoin will hold at the $30,000 range, and Ethereum at the $2,000 level. But if the Nasdaq Composite falls to 11,000, “there’s a shot” that Bitcoin will breach $30,000, he said in an interview with Bloomberg TV.
Bitcoin fell as low as $30,339 on Monday, the least since July 2021. Ether dropped as low as $2,226, while the Nasdaq Composite fell 4.3% to 11,623.
Algorithmic stablecoins, such as TerraUSD, which lost its peg over the weekend, are creating volatility in all crypto, though he expects the stablecoin system to survive. “They are defending it. We will see how it goes. Certainly it’s not good for the overall ecosystem if it doesn’t go well,” said Novogratz, who is an investor in Terraform Labs.
Read More: Terra Stablecoin Backer to Lend Tokens After Losing Dollar Link
He’s still optimistic about crypto’s long-term prospect given the momentum of institutional adoptions even with Bitcoin down more than 50% from its record high reached in November. The new institutional players are “coming in with a very long term focus,” he said, citing BlackRock Inc, Blackstone Inc., Citadel, and Apollo Global Management Inc. as examples.
Galaxy Digital, which offers businesses ranging from crypto trading and asset management to mining, posted a loss in the first quarter against a backdrop of large digital asset price declines.
The net comprehensive loss was $111.7 million, compared to a gain of $858.2 million in the year-ago period, primarily due to unrealized losses on digital assets and investments in its trading and principal investment businesses. That was partially offset by profitability in investment banking and mining units. The company had warned of a loss of $110 million to $130 million in the first quarter through March 28, citing market volatility.
Galaxy said its asset management unit was managing $2.7 billion as of March 31, a 5% decline from end of last year.
(Adds Novogratz’s comments on Bloomberg TV starting in the third paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
