Wednesday, September 28, 2022

Mike Novogratz Takes a Detour, Says Terra’s Model Was Unsustainable

Mike Novogratz who is known for his stout belief in Terra’s LUNA and UST projects has shifted gears in the reverse stating that Terra’s business model was unsustainable. Novogratz made this statement during a recent interview with Jen Wieczner of the New York Intelligencer.

It is interesting to know that long before the epic collapse of both LUNA and UST tokens, Novogratz who is a veteran hedge-fund founder and CEO of Galaxy Digital had earlier tagged LUNA as his new favorite coin.

As the price of LUNA touched $100, Novogratz took to his Twitter handle where he brandished a “LUNA” tattoo on his shoulder; calling himself “an official Lunatic.” With Luna and the entire Terra ecosystem now battling for survival, Novogratz has finally admitted that he took on too much risk.

Responding to the question “if he envisaged the crash,” Novogratz said that his worries hinged more around the macro environment. Initially, he had hopes that Bitcoin would sit pretty within the $30k to $50k price zone.

Looking back right now, the Chief Executive acknowledged that the 18% interest rate that Anchor-Terra’s staking platform offered could not have been sustained for a long time.

With the reverberation from the fall of Terra reaching a couple of other Decentralized Finance (DeFi) protocols, Novogratz insisted that crypto is not a scam. The billionaire investor said;

“Bitcoin is a macro asset that is not going to fade away any time soon, and neither is Web3 going away also.” 

He stated that anyone who had invested in Bitcoin (BTC) at the start of the pandemic would by now have doubled his investment. But the same cannot be said for an investment of an equal amount in Zoom stocks.

Anyone who has followed Mike Novogratz for some time would attest to the fact that the billionaire is known for being very vocal about his convictions.

During a recent financial conference, Novogratz stated that Bitcoin and Ethereum (ETH) had fallen near their bottom. But for stocks, he stated that the bottom is still pretty much far from sight.

He also stated unequivocally that BTC and ETH will not touch down below $20,000 and $1,000 respectively. This prediction however proved false as Bitcoin went below $20,000 while ETH even went further below $900.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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