Billionaire Mike Novogratz says the crypto market will continue to consolidate for months to come - but urges investors to hold
- Billionaire Mike Novogratz on Wednesday encouraged crypto investors to hold their ground despite a sharp sell-off.
- The Galaxy CEO posted a two-and-a-half-minute video explaining how volatile price swings are normal.
- He also encouraged investors to buy during the dip.
On Wednesday, at the depths of a seven-day sell-off that wiped out nearly 50% of cryptocurrency market valuation, billionaire Mike Novogratz gave investors his advice: "Hold your ground."
In a two-and-a-half-minute video released by his firm, Galaxy Digital, the founder and CEO said that volatility is normal.
"The market is now going to consolidate for weeks, if not a couple of months, as it rebuilds confidence," Novogratz said.
He said the "giant liquidation" was a confluence of multiple factors - from the recent lapse of the tax deadline, which qualified some cryptocurrency holdings into long-term capital gains, to Elon Musk "poking the bear" with his comments over bitcoin's harmful environmental impact.
"We're not going to put Humpty Dumpty back together again in a week," said Novogratz. "But I want to stress loud and clear that the underlying progress that's happening in both the bitcoin ecosystem, Ethereum ecosystem, in much of the crypto ecosystem is full speed ahead."
The Galaxy chief also stressed that the value of cryptocurrency is the technology that is going to revolutionize how people transmit value to each other - in insurance, in derivatives, in banks.
"The great decentralized revolution is alive and strong. It's taken a price hit," Novogratz said. "Crypto suffered these washouts before and always came back strong."
John Wu - the president of Ava Labs, the team behind altcoin Avalance - was similarly unsurprised by the downturn.
"Generally when there's a lot of volumes, that's a sign of people clearing out," he told Insider. "That's why I think, there will be some stabilization."
The market cap for global digital currencies slid as low as $1.35 trillion on Wednesday, down 47% from a recent peak of $2.56 trillion on May 12, according to data from CoinMarketCap.com.