“That’s causing a lot of damage around the system. That’s causing deleveraging that’s accelerated,” Novogratz said.
The crypto market has witnessed $1 trillion wiped off from its total value for the first time since early 2021. Bitcoin plunged more than 50% this year. On Tuesday, it declined 2.5% to $22,651.
“We’ve gotten to levels that I think should be close to the bottom – $20,000 bitcoin, $1,000 ethereum,” he said. “There’s been a tremendous amount of capitulation and fear and so usually not a good area to sell. It doesn’t mean we can’t go lower. I think the macro environment is still pretty challenging out there. But there’s been a lot of damage done.”
Other risk assets such as stocks have been hit hard as the Federal Reserve hiked interest rates to curb the increasing inflation. The S&P 500 on Monday closed inside a bear market. Investors were now considering the Fed may hike interest rates by 75 basis points on Wednesday after last week’s scorching inflation reading of 8.6% for May.
