August 15, 2022

Galaxy Digital CEO Michael Novogratz is anticipating that the digital asset market can be “risky and tough” for the subsequent few quarters after posting weak leads to Q1 2022.

Novogratz iterated these sentiments throughout the Galaxy Digital earnings calls and added that the inventory market and crypto correlation will seemingly be weighing down the crypto marketplace for a while.

He stated, “Crypto in all probability trades correlated to the Nasdaq till we hit a brand new equilibrium. My intuition is there’s some extra injury to be accomplished, and that can commerce in a really uneven, risky, and tough marketplace for at the very least the subsequent few quarters earlier than persons are getting some sense that we’re at an equilibrium.”  

BTC-Nasdaq volatility may breach $30,000

In a current report, Financial institution of America analysts had additionally known as Bitcoin a risk asset, questioning its status as an inflation hedge due to its high correlation with the stock market.

While the Nasdaq was down amid weak broad market sentiments, Bitcoin experienced a 10% fall on May 9. BTC dipped below the $31,000 level, as the digital asset market lost almost half a trillion in cumulative market cap, as per data available on CoinGecko.

Galaxy Digital chief also predicted in an interview with Bloomberg TV that Bitcoin will hold the $30,000 line if the Nasdaq Composite holds above the 11,000 level. However, in another interview with CNBC, the executive had remarked, “I do think there’s more pain to come,” adding that Nasdaq might even touch the “final destination” of 10,000. And if that happens, Bitcoin could slide under the crucial level of $30,000, according to Novogratz.

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Weak financial numbers for Galaxy Digital in Q1

Novogratz’s comments also come at a time when Galaxy Digital Holdings Ltd. posted a net comprehensive loss of $111.7 million, compared to an $858.2 million gain in Q1 2021. The company underlined the reason for the grim numbers, adding, “The decrease was primarily related to unrealized losses on digital assets and on investments in our Trading and Principal Investment businesses, partially offset by profitability in our Investment Banking and Mining businesses and lower operating expenses.”  

Additionally, Galaxy Digital Asset Management reported assets under management (AUM) of $2.7 billion as of March 31, 2022, which is a 5% quarter-on-quarter fall.

At the time of press, Bitcoin is trading for $31,200 — down 55% from its November 2021 peak of over $69,000. 

And in this market, the depegging of UST and the following determination of Terraform Labs (TFL) to liquidate BTC wallets has performed a task. In the meantime, Novogratz opined, “They [TFL] are defending it. We’ll see the way it goes. Definitely, it’s not good for the general ecosystem if it doesn’t go properly,”

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