Billionaire bitcoin bull Mike Novogratz says crypto should and will be regulated and that the FTX disaster has created a “confidence deficit” throughout the industry
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The FTX disaster has created a “confidence deficit” in crypto, according to bitcoin bull Mike Novogratz.
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The industry should and will be regulated, he said, pointing to the fallout of Sam Bankman-Fried’s crypto exchange.
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But while investors are reeling from this bout of volatility, crypto isn’t going anywhere, he told CNBC.
The FTX debacle has created a “confidence deficit” in the cryptocurrency market, according to bitcoin bull and Galaxy Digital CEO Mike Novogratz, who argued that the industry should and will be regulated following the fall of Sam Bankman-Fried’s exchange.
“This is about transparency and disclosure, in many ways. Our industry has failed to self-regulate. I think the money side of crypto, companies like ours that buy and sell and lend and do derivatives, are going to be regulated and should be,” he said in an interview with CNBC on Wednesday.
Novogratz pointed to the messy balance sheet of FTX, which did not have an internal accounting department and intertwined its finances with Alameda Research, its affiliated trading firm. Sources familiar with the companies claimed Alameda traded customer funds from FTX, CNBC reported, and FTX’s new CEO, who is leading the company through Chapter 11 bankruptcy proceedings, said employees may have even used company funds to buy homes and personal assets in the Bahamas.
“I think coins should be segregated in your account and they shouldn’t be lent unless you give them permission to lend,” Novogratz said, noting that other exchanges, like BlockFi, had clearer terms on what customer funds are used for .
“This is always about building trust with your customers. And right now we’re in a lack of trust. People think there’s a black swan around every corner, that everyone else is a sociopath who says one thing and does another,” Novogratz said .
But while Novogratz called the situation a “crisis of confidence” and warned that investors were not “out of the woods” yet, he believes crypto will remain in the mainstream.
“There are 150 million people who have already decided to store some of their net worth in bitcoin, in this decentralized community that’s verified in cryptography. And so in no way is bitcoin going away, or frankly, the blockchain and Ethereum and everything else, ” he said.
Other major investors have also expressed renewed bullishness despite the shocking collapse of Bankman-Fried’s stock market. Ark Invest’s Cathie Wood reiterated her prediction that bitcoin would reach $1 million in the next decade, as crises can ultimately strengthen the industry and show “survivors”.
Read the original article on Business Insider
