Mike Novogratz on Crypto Riches: “It’s not normal to make 200x your money on stuff”
by Arthur · July 21, 2022
Mike Novogratz has admitted that the huge returns experienced with some crypto investments are “not normal”, just months after the blockchain project he promoted made investors absurd profits before collapsing completely.
Speaking at Christie’s Art+Tech summit in New York on Wednesday, the CEO of investment firm Galaxy Digital said “greed is a powerful emotion” and that “not everyone can be an investor.”
Novogratz, like Tuesday so crypto industry looked “like a bunch of idiots,” noted a fan of the Terra blockchain, which made headlines when it crashed spectacularly in May and billions of dollars in investments went up in smoke.
The billionaire investor even got a Luna tattoo, calling himself a “Lunatic,” a term previously used to describe fans of the original cryptocurrency of the now-defunct Terra network.
But he said at Wednesday’s event at Christie’s that earning “200 times your money” was not realistic.
“I had friends who had bought a lot of crypto and it had changed their lives—guys that I grew up with who weren’t making a lot of money but suddenly had a net worth of $5 million in crypto.” Novogratz said.
“And I took a couple of them in October and I shook them and made them look me in the eye, [and] I said, ‘You have to sell half or two-thirds of this, it’s not normal to make 200 times your money on things,'” he added.
LUNA attracted investors because of the huge returns it promised: at its height, it exploded in value, reaching an all-time high of $119.18 in April – a 12-month increase of over 530%, according to CoinMarketCap data.
But it was not sustainable, and LUNA collapsed – hard. The protocol’s stablecoin, an algorithmic token that relied on code to keep its price stable, lost its link and investors who had faith in the technology lost everything. Report later appeared of “lunatics” who admitted they had lost their savings – some even considering suicide.
A former investment banker who believes Bitcoin and Ethereum are the future of finance, Novogratz has made millions investing in crypto. He warned on Wednesday that it is difficult to be an investor.
“It’s very difficult to be a good investor,” he said, “it takes practice, it takes pain, it takes knowledge, it takes practice.”
In other words, not everyone can be like Novogratz.
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