The worldwide cryptocurrency market capitalization was trading at $1.43 trillion, down 1% in the past 24 hours. The entire bitcoin trading volume, however, fell by 14% to $156.55 billion.
Mike Novogratz, CEO of Galaxy Digital and a millionaire, believes the crypto markets will not recover anytime soon.
Even if rising adoption from traditional financial institutions has kept the CEO of the investment management firm enthusiastic about the crypto market overall, he is not bullish on the next few quarters, according to the 2022 Galaxy Digital Q1 investor call.
“Crypto probably trades correlated to the NASDAQ until we hit a new equilibrium… My instinct is there’s some more damage to be done, and that will trade in a very choppy, volatile and difficult market for at least the next few quarters before people getting some sense that we’re at an equilibrium. At that point I’m actually quite optimistic.”
Galaxy Digital reported a net comprehensive loss of $111.7 million in the first quarter owing to huge price drops in digital assets. In the previous year, the company made $858.2 million in profit.
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Despite the instability, according to Novogratz, Galaxy Digital is holding its own.
“Galaxy demonstrated yet another strong quarter against the backdrop of digital asset price declines, and I am proud to see the durability and sustained profitability of our operational business lines, including record contributions from our Investment Banking and Mining segments.”
Novogratz forecasts the top crypto asset by market capitalization. Bitcoin (BTC) will be valued at roughly $30,000, while Ethereum (ETH), the dominant smart contract platform, will be valued at around $2,000. At the time of writing, Bitcoin was trading at $30,888.27, while Ethereum was trading at $2,348.21.
The value of major cryptocurrencies has fallen. The prospect of a rapid increase in interest rates continues to weigh on cryptocurrency markets. Sluggish economic development is also hurting the digital cart’s popularity.
Over the last 24hrs, Terra’s LUNA has erased the wealth of investors that stands at almost $11 billion. At the time of writing, LUNA Price is down by 69% over the last 24hrs trading at $9.45.
The main reason for LUNA to see such a drop in the currency’s stablecoin UST, losing its dollar peg along with Binance suspending the withdrawals of UST and LUNA.
UST Experiment Fails With 40% Collapse
Of course, exactly which dollar you choose to buy will have an impact on your wealth, with Terra’s UST coin proving that not all dollars are made equal. The ‘stablecoin’, which was heavily lauded by LUNA lovers over its algorithmic design in recent months and the interest that buyers could earn through other mechanisms, spectacularly lost its peg yesterday, dropping as low as $0.60 per dollar:
It seems, then, that the great UST experiment has failed, with many getting burnt and the risk to the cryptosystem as a whole now clearly exposed. The community was lucky that this happened so soon into Terra’s UST program – one dreads to think what would have happened if it was 10x the size.
- Bitcoin fell under $30,000 for the first time in 10 months yesterday
- Holders’ de-risking seems to have sparked the crash, aided by UST’s collapse
- The ‘stablecoin’ dropped to $0.60 as the experiment failed
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Disclaimer The content covered in this article is NOT to be considered investment advice. I’m NOT a financial adviser. These are only my own speculative opinions, ideas, and theories. Do NOT trade or invest based purely upon the information presented in this article.
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