The CEO of the investment company Galaxy Digital, Michael Novogratz, finally speaks out about the recent financial disaster in the Terra ecosystem. Michael Novogratz is a known supporter of the Terra ecosystem, including its Luna cryptocurrency and so-called stablecoin TerraUSD (UST).
Mike Novogratz keeps his LUNA tattoo as a reminder that investing requires humility
In his first public statement since the spectacular failure of dollar-pegged stablecoin TerraUSD (UST) and its companion token LUNA, Mike Novogratz stresses how the loss should be a lesson and a warning for investors in cryptocurrencies. In an open letter, Mike Novogratz announced that his Terra-inspired tattoo would serve as a reminder to be humble in the world of venture capital investing.
There is no good news about what happened in markets or the Terra ecosystem. In Luna and UST alone, $40bn of market value got destroyed in a very short amount of time. Both large and small investors saw profits and wealth vanish. The collapse dented confidence in crypto and DeFi. My tattoo will be a constant reminder that venture investing requires humility. Mike Novogratz.
To that end, he has determined to keep the LUNA tattoo on his left arm, which he got as a reminder in TK. In an enthusiastic display of support for the now-collapsed Terra ecosystem, Novogratz revealed his wolf-themed tattoo to his 461,000 Twitter followers on Jan. 5 for the first time. Do Kwon, the creator of Luna and UST responded to Novogratz’s tattoo by calling him the “King Lunatic.”
The head of Galaxy Digital, Mike Novogratz, has stated that cryptocurrencies are here to stay. In other words, the amount of human capital flowing into the industry isn’t slowing down. He also said that while this might not imply that the cryptocurrency market will bottom and rise straight back up, it will require a lot of work.
The demise of Terraform Labs came just one day after the company reported dismal numbers for Q12022, including a net loss of $111 million. In the same period last year, when compared to the same quarter a year ago, Galaxy Digital earned an enormous profit of $858 million. Its share price plummeted by 40 percent to a recent low of $6.90, in a sign that investors were concerned about the company’s prospects. It has since rebounded somewhat, climbing over $8.00.
Since September 2020, Galaxy Digital has been a part of the Terra ecosystem, which before became one of the top 10 blockchain projects. Despite last week’s “heart-wrenching” market instability, Mike Novogratz believes that the crypto industry appears to be more robust than ever and will not go away any time soon. He said that Galaxy Digital invested in LUNA using balance sheet cash in Q4 2020 and that the firm’s treasury has never used UST.
The collapse of Terra has a domino effect across the crypto industry
Investors have been nursing their wounds since the price of UST plummeted to $.10 last week. Also, LUNA’s market capitalization fell from more than $40 billion to practically nothing. The collapse shaved around $350 billion off the overall cryptocurrency market capitalization as well. Furthermore, the drop saw Bitcoin and ether fall below psychologically crucial levels of $30,000 and $2,000.
Looking ahead, investors are bracing for a new bear market. Mike Novogratz stated that the era of cheap money has come to an end, and it is critical for investors to be disciplined, take profits along the road, and maintain a balanced portfolio.
However, critics of the Terra ecosystem have warned of collapse for years. Bill Ackman, a hedge fund billionaire, has referred to it as a “pyramid scheme.” To that end, Mike Novogratz said that the collapse damaged investors’ faith in crypto and DeFi. He continued by noting that people demand answers whenever money is lost so suddenly.
It’s not just Novogratz who has gotten tattoos in homage to the crypto industry. Tattoos dedicated to cryptocurrencies have also increased significantly in popularity. Furthermore, in 2021, crypto tattoo-related Google searches soared by 222 percent. According to data from Crypto Head, over 900 people worldwide have gotten a Bitcoin (BTC) “B” tattoo, with Dogecoin (DOGE) and Ether (ETH) inkings on the rise.
The collapse of Terra has elicited various responses in the cryptocurrency world. Its decline has had an impact on several crypto enterprises. After putting a significant portion of its assets into Terra, Crypto startup StableGains could be in trouble. The company is now in dire straits as it attempts to return money to its clients. According to reports, the firm is said to have lost at least $42 million from almost 4000 customers. Nowadays, the firm provides USD and USDC withdrawals denominated in UST’s recent peg, which is presently less than $0.1.
In the world of cryptocurrencies, there has been a distinct change in market behavior. Despite the fact that Terra’s value has tanked, investors are still purchasing it. The vast majority of these cryptocurrency investors are youths. The number of youngsters investing in potentially hazardous and volatile assets demonstrates an economic stability demand in today’s economy.
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