By George Ward
The CEO of the US-based crypto services provider Galaxy Digital Holdings, Mike Novogratz, has called on the digital asset industry to reflect on last year’s events and find ways to survive the transition period.
This comes as the virtual asset ecosystem experienced one of its most challenging periods following a slew of unfortunate events that devastated the industry in 2022.
Time to Face the Transition Period
In a recent discussion with CNBC, the crypto billionaire saw last year as the “grand washout” for the digital asset industry. Novogratz explained that all things with high costs and decreasing revenues got hit the hardest.
He added that there was a lot of negative news about the happenings in the industry, with those holding assets selling en masse and those with leverage going out of leverage. “As a result, the market has been cleaned,” he added.
However, the billionaire said that 2023 is a “transition period” and that the outlook for cryptocurrency is not that bad, but it is not great either. He further said the crypto industry had received regulatory scrutiny it had never experienced before.
Then, Novogratz added that there is time to heal and reverse the narrative as people will choose to cut costs to survive the period. The CEO suggests that there is still something to cheer for the fledgling digital asset industry despite the enormous storm it has witnessed.
According to him, cryptocurrency is here to stay for the long term. On the value of the two largest crypto assets, Novogratz disclosed that the prices of BTC and ETH have been relatively steady in the last couple of months.
The billionaire, however, explained that the market is relatively “clean,” but there are still critical issues regarding some crypto businesses like DCG, Gemini, and Genesis that need addressing.
A Worrying Trend
Mike Novogratz’s latest comment comes amid a crypto winter, with the industry facing general uncertainty worsened by the collapse of major digital asset service providers. The latest was the FTX collapse and its sister trading firm, Alameda Research, which continues to spread its contagion across the crypto ecosystem.
Before the FTX debacle, there was the Terra/LUNA fall which led to the collapse of the Three Arrows Capital (3AC) and the Celsius Network in the same year. Hence, it is no surprise that many companies operating in the sector continue to cut down on their workforce to remain in business.
There has been a string of layoffs recently as the industry continues to battle further losses to avoid bankruptcy.