- According to bitcoin bull Mike Novogratz, the FTX disaster has created a “confidence deficit” in crypto.
- Referring to the fallout from Sam Bankman-Fried’s crypto exchange, he said the industry must and will be regulated.
- But while investors are reeling from this period of volatility, crypto is not going anywhere, he told CNBC.
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The FTX debacle has led to a “lack of confidence” in the cryptocurrency market, according to Mike Novogratz, CEO of Bitcoin Bull and Galaxy Digital. .
“It’s about transparency and disclosure in many ways. Our industry has failed to regulate itself. I think the money side of crypto, companies like ours that buy and sell and borrow and do derivatives, needs to be regulated. Will happen and should happen,” he said in an interview with CNBC on Wednesday.
The Novogratz pointed to the messed up balance sheet at FTX, which had no internal accounting department, and the financial ties to its affiliate trading company Alameda Research. Sources familiar with the companies claimed that Almeida was trading with money from FTX clients, CNBC reported, and FTX’s new CEO, who is guiding the company through Chapter 11 bankruptcy proceedings, said the company’s funds may also have been used to buy a house and personal items. the Bahamas.
“I think coins should be segregated in your account and they shouldn’t be loaned out unless you give them permission to lend,” said Novogratz, noting that other exchanges, such as That Blockfi, had clear terms about what customers’ money is for. would be used.
“It’s always about building trust with our customers. And right now, we’re in a confidence deficit. People think there’s a black swan around every corner, that everyone is a sociopath, who says one thing and does it,” Novogratz said.
But while Novogratz called the situation a “confidence crisis” and warned that investors weren’t “out of the woods” yet, he believes crypto will remain mainstream.
“There are already 150 million people who have decided to store some of their wealth in bitcoin in this decentralized community that has been cryptographically verified. And so bitcoin is not going away in any world, or frankly Se, blockchain and ethereum and everything else,” he said.
Other major investors also showed renewed bullishness despite Bankman-Fried’s shocking stock market collapse. Arch Invest’s Cathy Wood reiterated her prediction that bitcoin will hit $1 million in the next decade as the crisis could finally solidify the industry and reveal “the survivors”.