Billionaire crypto bull Mike Novogratz says the market is 90% through its deleveraging cycle but prices will be choppy until there's a narrative shift

• The crypto bull Mike Novogratz thinks the market is about 90% through its deleveraging cycle.
• He believes the drop in bitcoin was a deleveraging movement, due to companies operating off "excessive" debt.

Galaxy Digital CEO Mike Novogratz, the crypto bull who has made billions investing in crypto, said excessive amounts of debt that the crypto sector previously had are leaving, but most of it is gone now.

"It feels like we're 90% through that deleveraging," he said in an interview with CNBC. "The problem is for you to go much higher, you need the narrative to go much higher and you need new capital to come in."

For now, Novogratz sees the sector going "choppy sideways" for a while until the Federal Reserve pulls back from its monetary tightening to change the macroeconomic narrative, or until damage to the crypto market has healed, "people get equilibrium, and the market gets going again."

That view comes after a massive sell-off in the crypto market, leading a number of crypto firms to run low on liquidity. Many have either paused customer withdrawals or, in the case of Voyager Digital and Three Arrows Capital, filed for bankruptcy.

Bitcoin has lost roughly 70% of its peak value in November of last year, when the cryptocurrency was worth around $67,566.83. It currently prices around $21,370.

Novogratz added that the crypto market doesn't have a central bank acting as a lender of last resort that could step in during a crisis. Meanwhile, the crypto sector was far too leveraged.

"Shame on lots of the players for running what's just irresponsible not just leverage but asset-liability mismatch, taking consumer deposits in overnight and lending them out," he said.