Government should fear AI, not crypto: Galaxy Digital CEO
Mike Novogratz, CEO of investment firm Galaxy Digital, told investors he is shocked by the amount of regulatory attention for crypto rather than artificial intelligence (AI), a technology he believes will trigger a “deep false” identity crisis.
The CEO explained on the firm’s fourth quarter conference call on March 28 that the US government is “completely upside down” in choosing to focus so much on crypto regulation and yet turn a blind eye to AI:
“When I think about AI, it shocks me that we talk so much about crypto regulation and nothing about AI regulation. I mean, I think the government has got it completely on its head.”
This concern seemed to stem from Novogratz’s fear that AI will trigger a “profound false” identity crisis.
“In many ways, one of the best use cases for crypto will be identity around AI, because pretty soon you’re going to have a fake Mike Novogratz, hopefully with hair […] how do you prove identity in such a world?” he said.
However, he believes blockchain-based applications will play a “huge role” in combating some of the problems presented by AI:
“Crypto and blockchain are going to have a big role in that. It’s silly to think we’re going to cache this industry because of Sam Bankman-Fried in Bermuda shorts, period.”
That said, the US Commodity Futures Trading Commission recently engaged in conversations about AI and its impacts with the Technology Advisory Committee last week.
Selling exhaustion, China reliefs
As for the current state of the market, Novogratz said “seller exhaustion” and the reopening of China have helped the crypto industry recover remarkably so far in 2023.
“All the sales that needed to be made were made, right? There was so much bad news, if you had to sell, panic selling and just the nervousness of, ‘Oh my God! This thing could go to zero,’ and people were in pure panic, you had seller’s exhaustion,” he said.
After a tough zero-COVID approach by the Chinese government, Novogratz said he has since noticed more crypto activity coming out of China.
“China took the regulatory boot off the necks of their tech companies, and that includes crypto, [so] you see more activity from Asia.”
Related: Could Hong Kong really become China’s proxy in crypto?
From a more technical lens, Novogratz was confident that the crypto market will continue on an upward trajectory through the rest of 2023:
“The market feels strong, and when I look at it technically on charts, we’ve had big weekly bars. I’m surprised to hear myself say this, given where my thinking was at the end of December, but it wouldn’t surprise me if we was significantly higher three months, six months, nine months from now.”
The strong rise in the crypto market also reflected Galaxy’s balance sheet, with the company revealing today in its quarterly results that it finally returned to profit after a tough loss of $1 billion in 2022.
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