Galaxy’s Novogratz believes crypto users will pivot to trusted custodians
In a conversation with CBNC, Mike Novogratz, the founder of Galaxy Digital, alluded to the rising confidence chaos already pervading the crypto space. According to him, this will prompt digital asset users to seek trusted asset custodians. Thus, noting Fidelity Investment company as a go-to for clients.
Novogratz reckon crypto users will seek trusted safekeeping
A discussion arose during Mike’s interview with CBNC regarding the case of shattered confidence in industry players. This stemmed from the implosion of FTX, which immediately sparked skepticism from crypto users. Mike responded that the incident would drive crypto enthusiasts to forage for ‘safe-haven’ custodians.
While at it, he mentioned Fidelity Investment firm as a go-to for such service. The firm recently emerged with intentions to offer digital assets services. Mike said it could satisfy the security wants of crypto users.
Furthermore, he referenced Fidelity’s presence in the industry in September, around the time Bitcoin shed over 50% of its worth. For context, BTC lost over 65% of its market value in 2022. All the other assets on the cryptocurrency market dropped almost at an equal pace.
Rebuilding trust in the crypto market
Mike opined that he sees a window of opportunity opening for buyers eventually. But it would require trust to seize this chance. Meanwhile, this would take a while to redevelop.
Galaxy Digital was among the firms exposed to FTX with a $76.8 million investment. Several digital firms also reported a similar situation during the bourse’s insolvency. Mike Novogratz reportedly did not expect to recoup the company’s funds lost to the FTX downfall.
According to the record, Sam Bankman-Fried, the CEO of FTX, filed the exchange for Chapter 11 bankruptcy on November 11. That followed the refusal of Binance to buy out the firm amid its financial crisis.
Findings from court documents revealed that affiliates of the firm currently owe 50 of their top creditors more than $3 billion. This made Novogratz assert that there is an existing market confidence crisis. Nevertheless, the market has yet to recover from it.
The FTX turmoil, combined with the unfortunate meltdowns to pervade the crypto industry over the past months. Novogratz came to the spotlight in June amid the rundown of Terraform Labs for his involvement with the company. He later referred to his affiliation with the firm as a terrible mistake.
