Mike Novogratz, founder, CEO, and founder of Galaxy Digital said that the dramatic twin collapse of TerraUSD (UST), the dollar-pegged stablecoin, and its twin companion LUNA, is a harsh reminder of the volatility and risk associated with cryptocurrency.
The former backer of these cryptocurrencies, Novogratz, commented that what happened to the markets and the Terra environment was terrible. He pointed out that UST and Luna alone lost a valuation of $40B within days. Many small and large investors saw their wealth and profits vanish in a week.
Novogratz said that this singular collapse had naturally dented the confidence of investors in DeFi and cryptocurrencies. He presented his views in a post on the website of Galaxy Digital.
But Novogratz says that all is not lost and, as a sign, he has decided to retain the tattoo of LUNA, which he had imprinted on his arm, and it will remain as a sign that investing in crypto ventures needs constant humbleness and awareness.
He said that his tattoo will constantly remind him that investing in venture capital requires a great deal of humility.
Investors around the world have been left to nurse their setbacks since the UST prices dropped abruptly last week to below $0.10. and along with it, LUNA’s capitalization slid into oblivion from $40B a couple of weeks ago.
Novogratz Talks About His Fall
Novogratz said that this loss of around 99% had wiped out close to $350B in market capitalization from the cryptocurrency market within days.
The fall also affected Ether and Bitcoin as they slit below the psychologically vital price levels of $2,000 and $30,000.
The collapse came at an inconvenient time for Novogratz and Galaxy. It had already posted an underwhelming number in the first quarter of 2022 that included a $111M loss. It posted an $858M profit in the first quarter of 2021. Its stocks fell to a low of $7 before recovering to end at $8.