Stock Market

‘My tattoo will be a constant reminder that venture investing requires humility,’ says Michael Novogratz, with a ‘Luna’ tattoo, after the crypto’s collapse – News Opener

For the past few days, many crypto investors have been asking the whereabouts of Michael Novogratz.

Once a backer of cryptocurrency Luna
LUNAUSD,
-5.26
,
the billionaire investor got a wolf-themed tattoo to demonstrate his support. However, Luna collapsed last week, plunging to close to zero, from over $80 in early May. Its sister coin USDTerra
USTUSD,
+11.11%
,
or UST, a stablecoin that was structured to always trade one-to-one against the U.S. dollar, fell below $1 and was trading as low as 5 cents at one point.

“My tattoo will be a constant reminder that venture investing requires humility,” Novogratz wrote in an open letter published Wednesday. 

The principal investments team of Galaxy Digital
GLXY,
-2.48%
,
where Novogratz serves as a chief executive, invested in Luna in the fourth quarter of 2020 using balance sheet capital, Novogratz wrote in the letter. The firm’s treasury does not utilize algorithmic stablecoin, he added. 

“Our team’s initial thesis for investing in Luna was centered around the expansion of blockchain-native payments systems,” Novogratz wrote.

The billionaire said the collapse of UST and Luna serves as a reminder that in investing, it’s important to “keep a diversified portfolio, take profits along the way, have a risk management framework, and understand that all investments happen in a macro framework.” “Galaxy did all of these with regards to our investment in LUNA,” 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,” Novogratz wrote.

The firm expects a $300 million loss in net comprehensive income this quarter as of May 11, bringing the partners’ capital to $2.2 billion, a 12% decline from March 31, according to a preliminary update released on May 13.

Novogratz said he has always recommended investors to allocate 1% to 5% of their assets to crypto. He highlighted that the volatility in crypto market is likely to continue, while macro environment remains challenging. But “crypto is not going away,” he wrote.

 Source link

Back to top button
SoundCloud To Mp3