Home Markets Crypto’s Forced Deleveraging Is Over, Says Bitcoin Bull Mike Novogratz

Crypto’s Forced Deleveraging Is Over, Says Bitcoin Bull Mike Novogratz

Crypto’s Forced Deleveraging Is Over, Says Bitcoin Bull Mike Novogratz
  • The forced deleveraging that has plagued the crypto market over the past quarter is over, Mike Novogratz said.
  • He believes the crypto market has reached equilibrium and awaits new narratives in the space.
  • Bitcoin remains an attractive asset amid macroeconomic uncertainty, Novogratz said.

Billionaire Bitcoin bull Mike Novogratz believes the forced deleveraging of the cryptocurrency market is over and investors can expect new narratives to shape the space after a brutal quarter for digital assets.

His optimism comes after a difficult year for crypto investors, following the crash of the stablecoin Terra and the associated Luna token, which triggered a domino effect of losses and bankruptcies across the sector. Crypto has seen a few rallies since then, but bitcoin and ethereum are still down around 60% from their November highs.

“We had a forced deleveraging that happened because of a lot of reckless credit policies in a lot of places, which I think exacerbated the severity of the decision,” Novogratz said in an interview with CNBC.

But Novogratz believes the cycle is ending, with the potential for more positive change in the crypto market to come this quarter.

“The worst is over,” he said of last quarter’s big sell-off. “There’s no more forced deleveraging that’s going to happen. And so now the market is at equilibrium, and it’s waiting for new stories.”

Developments like the upcoming Ethereum merger could be a big narrative shift for the market that generates renewed excitement among investors, Novogratz said. The merger is one of five planned updates to the Ethereum blockchain, CoinDesk reportedand will move the blockchain from a proof-of-work system to a proof-of-stake system to increase efficiency.

Bitcoin may also be on a new path, with Coinbase’s recent partnership with BlackRock“It’s like a monumental announcement,” Novogratz said.

Bitcoin’s continued adoption in mainstream finance keeps Novogratz bullish on the largest crypto by market capitalization. He added that he was particularly optimistic about the coin’s prospects in the current economic climate.

“I think bitcoin remains a very good macro asset for an environment where the macro is quite uncertain,” Novogratz said.


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