- Galaxy Digital CEO Mike Novogratz is still mostly upbeat about crypto in 2023.
- “The outlook for crypto is not horrible, but it’s not great,” Novogratz told CNBC.
- The bitcoin bull said crypto brokerage Genesis’ liquidity woes are hanging over the industry.
Galaxy Digital CEO Mike Novogratz says 2023 will be a time for the cryptocurrency industry to “cut costs” and “survive this transition period” after the collapse of FTX, along with a slew of other market meltdowns still spilling over from last year.
The bitcoin bull says the crypto outlook is “not horrible, but it’s not great,” he told CNBC’s Squawk Box on Tuesday.
“We’ve got regulatory headwinds that we didn’t have before,” Novogratz said. “We’ve got time to heal and rebuild narrative. And so people are going to cut costs and survive this transition period.”
Novogratz comments come at a time of great uncertainty for the industry.
The nascent space has endured the fallout of its biggest players like Sam Bankman-Fried’s crypto exchange FTX, hedge fund Three Arrows Capital, and algorithmic stablecoin TerraUSD.
The uncertain fate of Digital Currency Group (DCG), the crypto conglomerate that own digital asset brokerage Genesis and asset manager Grayscale, is an overhang for the industry as well.
Genesis’ lending arm halted loan redemptions and originations in November due to a severe liquidity crunch. The firm and its parent company are facing accusations of fraud from Gemini cofounder Cameron Winklevoss.
Novogratz says that the Gemini and DCG debacle won’t involve “a lot of selling” for crypto markets, but it’s “just not great news.”
DCG is being investigated by US prosecutors for internal transfers between the parent company and its embattled lender, Bloomberg reported on Friday, citing unnamed sources.