Some investors wear their failures like a badge of honor, but for crypto billionaire VC Mike Novogratz, it’s more like a tattoo—literally.
On Wednesday, crypto-focused venture capital firm Galaxy Digital posted a letter from CEO Novogratz discussing its investment in the now-dead Luna/Terra ecosystem, which imploded spectacularly last week when its algorithmic stablecoin UST cratered, wiping out Luna’s $40 billion market cap. In the letter Novogratz reflects on macroeconomic conditions and how they’ve affected crypto markets, but still maintains to be bullish on the volatile asset class despite envisioning dark days ahead.
“To start, the global macro backdrop has been brutal for all risk assets this year,” Novogratz writes. “Growth stocks with negative cash flow are down as much as 50-70% this year. Crypto has been under pressure, with core assets like BTC and ETH down about 58% from all-time highs—and altcoins are down an average 80% from all-time highs.”
That’s all fine, but Novogratz’s letter takes a turn when he refers to a tattoo. “With hindsight things always look clearer,” Novogratz wrote. “My tattoo will be a constant reminder that venture investing requires humility.”
Novogratz was one of Terra/Luna mastermind Do Kwon’s earliest and loudest supporters, pouring $25 million into the project and announcing his support on Jan. 4 with a giant shoulder tattoo of a wolf howling at the moon, emblazoned with the words “Luna.”
“I’m officially a Lunatic!!! Thanks @stablekwon And thank you my friends at Smith Street Tattoos,” Novogratz tweeted.
Smith Street Tattoos did not immediately respond to Motherboard’s request for comment.
Galaxy Digital, which prides itself on investing primarily in crypto assets, understands this downturn better than most. The company reported a loss of at least $300 million thus far this quarter (beginning after March 31). The firm handles $2.3 billion in assets but reports that it does not hold other algorithmic stablecoins.
Novogratz wrote that watching the collapse of Terra’s ecosystem and hearing the stories of investors who lost their savings was “heart-wrenching.” The rapid collapse of the algorithmic stablecoin over the course of a few days saw the destruction of at least $40 billion in market value and a tepid post from founder Kwon that essentially encouraged the community to fix it themselves.
Despite the collapse of the third-largest stablecoin, an ongoing crypto market selloff, and wipeouts ruining countless investors, Novogratz is bullish on crypto.
“Crypto is not going away. The amount of human capital moving into the space isn’t slowing down. The focus on building decentralized infrastructure that allows value and ownership to flow as freely as information on the internet, isn’t slowing down. The GDP of the metaverse is heading one way. Our community is resilient, has a shared belief in a new way of doing things, and the assurance that this is the very early innings.”