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M. Novogratz, the creator of Galaxy Digital company, spoke to CBNC about the growing trust uncertainty that has engulfed the cryptocurrency space. He predicted that this would motivate users of digital assets to look for trustworthy asset managers.
The cases of crisis
Cases of broken trust between players in the industry were discussed during Mike’s CBNC talk. Users of cryptocurrencies began to express skepticism as soon as FTX crashed.
In response, Mike said that the incident would prompt those interested in cryptocurrencies to seek out custodians as a safe haven. He also observed Fidelity as a company that receives requests for these works.
The business just recently began operating with the goal of providing services related to digital assets. This might satisfy cryptocurrency users’ security needs, according to Mike.
He added that Fidelity had been active in the market as early as September, when Bitcoin had lost more than half its value.
To put things in perspective, in 2022, the market value of BTC fell by more than 65 percent. Similar rates of decline were seen in all other marketable securities for cryptocurrencies.
Regaining market trust for cryptocurrencies
This would eventually create a chance for purchasers to build better trust in the crypto market, according to Mike. However, one needs trust in order to seize this chance.
At the same time, the adjustment process will take time. With a $76.8 million investment, Galaxy Digital is one of the businesses involved in FTX.
Related states during bankruptcies on stock exchanges have also been reported by a number of digital businesses. M. Novogratz did not anticipate to regain the money the business lost whe FTX failed.
As for the collapse of FTX, it was heavily influenced by Binance. According to court documents, 50 senior creditors are currently owed more than $3 billion by the company’s affiliates. This prompted Novogratz to insist that there was a crisis of trust.
But the prices have to bounce back in the future. The cryptocurrency sector has been completely overtaken by the unrest in the FTX market and the regrettable crash over the last several months.
Due to his involvement with Terraform Labs, Novogratz attracted attention in June when he filed for bankruptcy.
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