Mike Novogratz Now Admits That Terra's Model Was Unsustainable
Galaxy Digital CEO Mike Novogratz has said that although he was “worried about the macro environment,” he was hoping bitcoin (BTC) “would stay in the USD 30,000 to USD 50,000 range.” At the same time, he argued that the model his once-favorite crypto Terra (LUNA) was built on was unsustainable.
The comments came in an interview with New York Magazine published on Sunday.
Despite the above-stated comment, Novogratz argued that things need to be placed in perspective: between buying Zoom stock and buying bitcoin at the beginning of the COVID-19 pandemic, he said, " today you would have doubled your money on bitcoin and you’d have made nothing on Zoom."
The CEO added that,
"So that’s what I think is hard for people to get their heads around. This has been a complete and total old-school ass-beating. But it’s important not to throw the baby out with the bathwater because we had a speculative mania in lots of asset classes. Bitcoin is not going away as a macro asset."
However, looking at the data, at the very start of 2020, BTC was trading at around USD 29,500, rising rapidly. Today, in the midst of crypto winter, it's at USD 21,423. In November 2021, it hit its all-time high of USD 69,044. At the same time, Zoom traded around USD 70 at the beginning of 2020, currently standing at USD 122.
Novogratz, who was a major investor in the collapsed Terra ecosystem, also admitted in the interview that, “with hindsight,” it was running an unsustainable business model.
“With hindsight, looking at Luna, you can’t offer people 18 percent interest, as they did with Anchor, and not have the world all run into yours,” Novogratz said, referring to the Terra-based lending and borrowing protocol that famously offered users yields of up to 20% on
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