Galaxy Digital's Mike Novogratz Says Two-Thirds of Crypto Hedge Funds Will Fail

The founder and chief executive of digital asset merchant bank Galaxy Digital Holdings, Mike Novogratz, said at the Piper Sandler Global Exchanges & Brokerage Conference in New York that two-thirds of crypto hedge funds will fail due to the current cryptocurrency market downtown.

According to Bloomberg News, Novogratz told the audience that volume will go down, and hedge funds will have to restructure.

He added that "there are literally 1,900 crypto hedge funds," with his estimate that "two-thirds will go out of business.”

According to a report from PwC, in 2020, there were around 150 active crypto hedge funds, with almost two-thirds launched in 2018 or 2019.

The recent tumble in token prices over the last six months, which has seen Bitcoin fall more than 50% from record highs, is due to the crypto market’s reaction to the Federal Reserve’s removal of stimulus, according to Novogratz, who is a former Fortress Investment Group hedge fund manager.

Galaxy and Novogratz have come under scrutiny in recent times for their role in the collapse of the Terra blockchain, with Novogratz saying the failure has impacted confidence in cryptocurrencies and the DeFi market as a whole.

By Sam Boughedda

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