Prominent Terra Investor Mike Novogratz Has Finally Spoken Out About The UST/LUNA Crisis.

Galaxy Digital founder and CEO Mike Novogratz has now spoken out about the terrible demise of LUNA and UST after an unusually long silence. Terra’s LUNA cryptocurrency was exposed to the billion-dollar crypto-focused merchant bank. 

Mike Novogratz published an open letter today describing how the Terra disaster occurred.

Mike Novogratz writes in his email that the global economic environment has been particularly harsh for risk assets this year, with growth stocks down 50% to 70% and major crypto assets bitcoin and ethereum down 58% from all-time highs. Since their peaks, altcoins have lost around 80% of their value.

He reminded readers that central banks are “unwinding a massive liquidity bubble” generated by injecting trillions of dollars into the banking system to combat the pandemic’s economic impacts. This macro backdrop, according to the Galaxy Digital CEO, put a lot of pressure on Terra’s native token, LUNA, as well as the reserves set aside to back the UST stablecoin.

He wrote:

“UST’s growth had exploded from the 18% yield offered in the Anchor protocol, which eventually overwhelmed other uses of the Terra blockchain. The downward pressure on reserve assets coupled with UST withdrawals triggered a stress scenario akin to a “run on the bank”,”

In September 2020, Mike Novogratz’s Galaxy Digital utilized balance sheet funds to invest in LUNA. The firm’s investing thesis, he said, is the “expansion of blockchain-native payments systems.” Novogratz got a tattoo of a wolf howling at the moon and the word “LUNA” to demonstrate his belief in the Layer 1 network.

Galaxy Digital, like many other investors, has been hit hard in recent weeks. The company expects to lose $300 million in net profits this quarter, as its capital fell by 12% to $2.2 billion.

Galaxy, on the other hand, will be able to weather the LUNA and UST storm thanks to its diverse portfolio and regular profit taking, according to Novogratz. “With our diversified business lines, Galaxy remains in a strong capital and liquidity position. We are well-positioned for long-term growth,” he added.

However, the billionaire investor plans to use his LUNA tattoo as “a constant reminder that venture investing requires humility.”

The devastation and agony inflicted on LUNA investors following the Terra network’s failure last week will live on in crypto fans’ minds forever.

According to Novogratz, the Terra implosion has harmed investor trust in crypto and decentralized finance as individuals process how quickly the crash occurred.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

CoinCu News

Prominent Terra Investor Mike Novogratz Has Finally Spoken Out About The UST/LUNA Crisis.

Galaxy Digital founder and CEO Mike Novogratz has now spoken out about the terrible demise of LUNA and UST after an unusually long silence. Terra’s LUNA cryptocurrency was exposed to the billion-dollar crypto-focused merchant bank. 

Mike Novogratz published an open letter today describing how the Terra disaster occurred.

Mike Novogratz writes in his email that the global economic environment has been particularly harsh for risk assets this year, with growth stocks down 50% to 70% and major crypto assets bitcoin and ethereum down 58% from all-time highs. Since their peaks, altcoins have lost around 80% of their value.

He reminded readers that central banks are “unwinding a massive liquidity bubble” generated by injecting trillions of dollars into the banking system to combat the pandemic’s economic impacts. This macro backdrop, according to the Galaxy Digital CEO, put a lot of pressure on Terra’s native token, LUNA, as well as the reserves set aside to back the UST stablecoin.

He wrote:

“UST’s growth had exploded from the 18% yield offered in the Anchor protocol, which eventually overwhelmed other uses of the Terra blockchain. The downward pressure on reserve assets coupled with UST withdrawals triggered a stress scenario akin to a “run on the bank”,”

In September 2020, Mike Novogratz’s Galaxy Digital utilized balance sheet funds to invest in LUNA. The firm’s investing thesis, he said, is the “expansion of blockchain-native payments systems.” Novogratz got a tattoo of a wolf howling at the moon and the word “LUNA” to demonstrate his belief in the Layer 1 network.

Galaxy Digital, like many other investors, has been hit hard in recent weeks. The company expects to lose $300 million in net profits this quarter, as its capital fell by 12% to $2.2 billion.

Galaxy, on the other hand, will be able to weather the LUNA and UST storm thanks to its diverse portfolio and regular profit taking, according to Novogratz. “With our diversified business lines, Galaxy remains in a strong capital and liquidity position. We are well-positioned for long-term growth,” he added.

However, the billionaire investor plans to use his LUNA tattoo as “a constant reminder that venture investing requires humility.”

The devastation and agony inflicted on LUNA investors following the Terra network’s failure last week will live on in crypto fans’ minds forever.

According to Novogratz, the Terra implosion has harmed investor trust in crypto and decentralized finance as individuals process how quickly the crash occurred.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Patrick

CoinCu News

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