April 25, 2024

Galaxy Digital CEO Says Crypto Turbulence Might Still Continue for a While

The Chief Executive Officer of Galaxy Digital, Michael Novogratz, envisages that the crypto market will continue to get volatile and quite difficult for some time to come. He said this because of the observed negative print of the sector in the first quarter of 2022.

He made this statement as part of his speech at the Galaxy Digital Earnings. He equally added that the correlation between the crypto and stock markets would be weighed down by crypto dynamics for a long time.

In his statement, he mentioned that it is probable that crypto trades in correlation with Nasdaq till a new equilibrium is met. Novogratz said that his instinct is that there are still more damages that will be done. Predicting that it will trade in a difficult and volatile market for some quarters before it is realized by people that they are at a point of equilibrium.

Volatility in BTC-Nasdaq Correlation Could Break $30,000

Analyst at the Bank of America had, in a recent report, referred to Bitcoin as a risky commodity. They question the coin’s position as a hedge against inflation since it is highly correlated to the stock market.

When Nasdaq experienced a downturn in the midst of poor sentiment in the general market, Bitcoin had its corresponding experience of losing 10% on the 9th of May. The asset dropped under the $31,000 mark as the general crypto market recorded nearly $ 500 billion in its total market capitalization. This is according to reports made available by CoinGecko.

Novogratz equally made a prediction while granting an interview on Bloomberg that Bitcoin’s chances of holding on to the $30,000 mark are dependent on Nasdaq first holding above the mark of 11,000. Whereas, in a separate interview with CNBC, Novogratz had said that he doesn’t think there are more pains. 

The executive stated that Nasdaq could, as a matter of fact, touch the 10,000 mark. If that were to be the case, Bitcoin might then slide beneath the significant $30,000 level.

Galaxy Digital’s Record of Weak Figures in Quarter 1

Michael Novogratz spoke at a time when his company, Galaxy Digital, recorded a net loss of $111.7 million. This is against the profit of $858.2 million it recorded in the first quarter of 2021. The company attributed its loss to the loss of digital assets and investments from its principal trading investment businesses.

In addition, the asset management arm of Galaxy Digital recorded total assets under management at $2.7 billion dollars by the end of March 2022. The record amounts to a fall of 5% quarter-on-quarter. 

While putting this together, Bitcoin was trading at $31,200. Going down by 55% off its peak in November 2021 at $69,000. 

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