Galaxy Digital CEO Mike Novogratz considers his LUNA tattoo a reminder that investing requires humility.
Ugly tattoos are generally peccadillo of one's youth. But this rule of thumb may not apply in the case of Mike Novogratz — although beauty is, of course, in the eye of the beholder.
The billionaire founder of Galaxy Digital, a crypto asset management firm, has been missing in action over the last week, which is surprising considering his investment in LUNA. Novogratz now emerged with an open letter to shareholders, saying:
"My tattoo will be a constant reminder that venture investing requires humility."
He said there is no good news in what happened in the markets, and the $40 billion of market value destroyed only in LUNA and UST dented confidence in crypto and DeFi.
"Whenever money is lost in such an abrupt fashion, people want answers."
"This macro backdrop put pressure on Luna and the reserves held to back UST. UST’s growth had exploded from the 18% yield offered in the Anchor protocol, which eventually overwhelmed other uses of the Terra blockchain. The downward pressure on reserve assets coupled with UST withdrawals, triggered a stress scenario akin to a 'run on the bank.' The reserves weren’t enough to prevent UST’s collapse. With hindsight things always look clearer."
Novogratz also noted that crypto moves in cycles and that he does not expect the market to bottom and head straight back up. It would rather take "consolidation and renewed confidence in crypto" for that to happen.