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DCG Crisis Likely ‘Not Involving Much Selling’ – Novogratz

Delbert Williams IIBy No Comments4 Mins Read

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Galaxy Digital Holdings CEO Mike Novogratz has dismissed concerns about the crisis facing the Digital Currency Group (DCG), saying Genesis is “not good news” but “a lot of It does not include the sale of

In a Jan. 10 interview on CNBC’s Squawk Box, Novogratz said he expects the current debacle facing DCG and its affiliates to “unfold” in the next quarter. .

“There’s still some overhang between DCG and Genesis and Gemini, and that’s going to happen next quarter. That’s not great,” Novogratz said, adding:

“I don’t think it will involve many sales. That’s not good news.”

DCG is a leading cryptocurrency conglomerate known as the owner and operator of Grayscale Investments, the world’s largest digital asset manager.

It also owns institutional lending firm Genesis, advisory firm Foundry, crypto exchange Luno, and crypto media company CoinDesk.

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Novogratz’s opinion is in stark contrast to Arcane Research’s Jan. 4 report, which “could severely impact the cryptocurrency market” as a result of the DCG’s “ongoing financial difficulties.” ​​warning investors to pay attention to

If DCG were to go bankrupt, the company would be forced to liquidate its assets and sell a sizeable position in the Grayscale Bitcoin Trust (GBTC) and other crypto-related trusts, putting pressure on cryptocurrency prices. He argued that it might.

However, Novogratz said that both Bitcoin (BTC) and Ether (ETH) have remained “pretty stable” despite “a lot of bad news” over the past few months and have even seen a rise in recent days. claimed to have been

“It’s a pretty clean market right now,” Novogratz said, referring to investors who have sold or reduced leverage in recent months.

Alarm bells first sounded for DCG and Genesis in November 2022 after Genesis suspended withdrawals on November 16, citing “unprecedented market turmoil” caused by the collapse of FTX and Three Arrows Capital. started.

In an open letter to DCG CEO Barry Silbert on January 2, Gemini co-founder Cameron Winklevoss said DCG-owned Genesis had yet to repay a $900 million loan owed to Gemini. claimed no. .

On January 10, Winklevoss wrote a second letter, this time to DCG’s board, claiming that Silbert and DCG were simply trying to fill a $1.2 billion hole in Genesis’ balance sheet. . He said Mr. Silver was “unfit” to run the company and called for his removal.

Coinbase layoffs were ‘the right thing to do’

Galaxy’s CEO also commented on Coinbase CEO Brian Armstrong’s recent decision to cut its workforce by another 20% to further reduce operating costs.

“2022 has been a blast for growth stocks and cryptocurrencies, so anything related to that […] It resulted in huge costs and reduced revenues — we were devastated,” says Novogratz.

“The CEO [including] Coinbase Brian, and rational CEO, is doing the right thing. ”

Novogratz said the outlook for cryptocurrencies is not bad, but also “not great.”

“We are facing unprecedented regulatory headwinds. We have time to repair and rebuild our narrative so people will be able to cut costs and survive this transition period,” he said. Added:

“2023 is the year we want to survive and keep up with the rise.”