The crypto market has still been trying to find its feet post the recent back-to-back turbulences. Companies are facing liquidity crunches, the staff is being laid off, dissolutions have become a reality, and many investigations are being carried out targeting perpetrators. Just when the LUNA episode unfolded, people from space thought the worst was over.
Well, that was just the beginning. 3AC and Celsius’ crises cropped up next, while the likes of Vauld, Voyager, and other entities followed suit. Even big names like Gemini and Coinbase couldn’t safeguard themselves from the macro instability. Retrospectively, their workers are bearing the brunt.
LUNA-tic opines on the whole scenario
People from the space have been quite frank about the current state of market affairs. Galaxy Digital’s Mike Novogratz was one of the latest ones to open up about the same. Talking at Bloomberg’s Crypto Summit on Tuesday, the executive contended that the recent turbulence in the crypto industry was a complete catastrophe. He said,
“What I don’t think people expected was the magnitude of losses that would show up in professional institutions’ balance sheets and that caused the daisy chain of events. It turned into a full-fledged credit crisis with complete liquidation and huge damage on confidence in the space.”
Novogratz has been a vocal promoter of LUNA’s Terraform Labs, and he had endorsed the now-defunct token a host of times in the recent past. The exec even has a LUNA tattoo and has previously referred to himself as a “LUNA-tic.”
In May, Novogratz said his LUNA tattoo “will be a constant reminder that venture investing requires humility.” However, now, he asserted that the downfall should have been seen coming. Talking about the lesson learned from the collapse of Terra’s tokens, the Galaxy Digital CEO said without hesitation that the industry and retail investors “really had very, very little concept of risk management.” He added,
“People knew, if they paid attention, the bet they were making. The bet turned out not to work, and it unraveled very quickly… There was inane risk management.”
Novogratz further blamed over-leveraging for having taken down firms. He said about bankrupt firms’ strategies, “That’s greed, that’s ignorance.”
The recent set of events has undoubtedly dented the confidence of both participants and non-participants from in and outside the the space. Resultantly, the same per Novogratz is
“… frustrating as heck because at times the whole industry looks like a bunch of idiots.”