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Mike Novogratz relates crypto crash to Long Term Capital Management crisis

Mike Novogratz equates crypto crash to Long Term Capital Management crisis Mike Novogratz corresponds crypto crash to Long Term Capital Management crisis Monica Noronha · 8 hours earlier · 1 minutes read

Investments

The crypto financier stated that while the worst might quickly be over for the crypto market, rates might still go even more south.

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Updated: June 15, 2022 at 3: 44 am

Mike Novogratz equates crypto crash to Long Term Capital Management crisis

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Michael Novogratz, a crypto financier, and CEO of Galaxy Digital, informed CNBC that the cryptocurrency market is going through the exact same chaos activated by Long Term Capital Management in 1998.

Long Term Capital Management was an extremely leveraged hedge fund run by Nobel Prize-winning financial experts and Wall Street traders. When the business folded, the U.S. Federal Reserve was required to bail it out to avoid a collapse of the monetary markets due to the fact that of Wall Street financial investment banks’ direct exposure to the fund.

Novogratz stated:

” We are going through what feels to me a bit like a Long Term Capital Management minute in crypto.

It was the huge hedge fund with all the utilize, and when it began relaxing, there was effects all over. We are seeing that in the crypto area today.”

Novogratz, who had actually purchased LUNA, blamed the collapse of the Terra environment and the continuous Celsius crisis for speeding up the deleveraging in the market.

” We’ve gone to the level that must be close to a bottom. $21,000 bitcoin $1,000 ethereum. There’s been a significant quantity of capitulation and worry.

Usually not an excellent location to offer, however it does not indicate we can’t go lower. I believe the macro environment is still quite challenging out there.”

Novogratz’s remarks come as the crypto market deals with among the worst crashes in history. The overall crypto market capitalization has actually dipped listed below $1 trillion, while Bitcoin ( BTC) fell listed below $21,000 on June 14, according to Cryptoslate information At the time of composing, Bitcoin was trading at $22,481 while Ethereum’s ( ETH) rate hovered around $1,225

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