Mike Novogratz has admitted that the huge returns experienced with some crypto investments are “not normal,” just months after the blockchain project he promoted made investors absurd profits before collapsing completely.
Speaking at the Christie's Art+Tech summit in New York Wednesday, the CEO of investment firm Galaxy Digital said “greed is a powerful emotion” and that “not everyone can be an investor.”
Novogratz, who on Tuesday said the crypto industry looked “like a bunch of idiots,” was famously a fan of the Terra blockchain, which made headlines when it spectacularly crashed in May and billions of dollars of investment went up in smoke.
The billionaire investor even got a Luna tattoo, and called himself a “Lunatic,” a term formerly used to describe fans of the native cryptocurrency of the now defunct Terra network.
But he said at Wednesday's event at Christie's that making “200 times your money” was not realistic.
“I had friends that had bought lots of crypto, and it had changed their lives—guys that I grew up with, who didn't make a whole lot of money but all of a sudden had a $5 million net worth in crypto,” said Novogratz.
I’m officially a Lunatic!!! Thanks @stablekwon And thank you my friends at Smith Street Tattoos. pic.twitter.com/2wfc00loDs
— Mike Novogratz (@novogratz) January 5, 2022
“And I took a couple of them in October and I shook them and I made them look me in the eye, [and] I said, ‘You have to sell half or two thirds of this, it's not normal to make 200 times your money on things,’” he added.
LUNA attracted investors because of the enormous returns it promised: at its height it exploded in value, hitting an all-time high of $119.18 in April—a 12-month increase of over 530%, according to CoinMarketCap data.
But that wasn’t sustainable, and LUNA came crashing down—hard. The protocol’s stablecoin, an algorithm token that relied on code to hold its price steady, lost its peg and investors who had faith in the technology lost everything. Reports later emerged of “Lunatics” admitting they had lost their life savings—with some even contemplating suicide.
Novogratz is a former investment banker who believes Bitcoin and Ethereum are the future of finance, and has made millions from investing in crypto. He warned Wednesday that being an investor is difficult.
“It’s really hard to be a good investor,” he said, “It takes training, it takes pain, it takes knowledge, it takes practice.”
In other words, not everyone can be like Novogratz.