Galaxy Digital CEO Michael Novogratz said he sees a bumpy road ahead for equity and crypto investors, though he’s still optimistic on crypto adoption and its real-world application.

Novogratz, whose firm provides financial services and investment management in digital assets, said that bitcoin is a store of value and will remain a “real macro asset.” He spoke at the Piper Sandler Global Exchange & Brokerage Conference on Wednesday.

For crypto and equity markets, Novogratz isn’t banking on a V-shaped recovery. Instead he predicts a combination of bottoms, ups-and-downs and sideways movement until a new narrative emerges. The U.S. Federal Reserve increasing rates in a crisis is causing hiccups and unpredictability in economic models, he said, adding that he’s “preparing for kind of a longer battle.”

Of approximately 1,900 crypto-focused hedge funds, Novogratz estimates that two-thirds could go out of business.

Even so, Novogratz says he will continue to hire people and isn’t seeing a shortage of talent or excitement in crypto. Galaxy is in a “really good position to build through this downturn,” he said.

“Why I’m still hiring people and optimistic is I see the adoption in real life” and in real applications, Novogratz said. In addition, Galaxy is continuing to sign up more investors.

On the collapse of Terra’s UST stablecoin, Novogratz said the key lesson is to not put all of your eggs in one basket, and have proper risk-management protocols. It’s also prudent to take some chips off the table along the way, he said.


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