Mike Novogratz who is a cryptocurrency enthusiast and billionaire investor, recently claimed that cryptocurrency hedge funds are carrying massive financial risks. Speaking to the media, Novogratz claimed that at present, the cryptocurrencies are continuously oscillating between red and green, showing signs of increased volatility.

He further claimed that it is possible that the ongoing financial pressure can prove to be too much for the cryptocurrency market, and it can result in one-third of crypto hedge funds going under. Before joining Galaxy Digital, Novogratz worked as a professional hedge fund manager for several years. His gloomy opinion on the matter of cryptocurrencies is in line with several other crypto investors who are issuing warnings on account of the current market situation.

Novogratz’s Prediction About Crypto Sector

As per a new article published by Bloomberg, Novogratz claimed that trading volumes in the cryptocurrency sector have been decreasing with consistency. He further claimed that there is a need for the restructuring of these hedge funds. He pointed out that there are currently around 1,900 hedge funds that consist of cryptocurrencies that are at risk.

He also claimed that the survival rate is going to be slashed by two-thirds of the total. Novogratz was speaking at the Piper Sandler Global Exchanges and Brokerage Conference in New York. It is interesting to mention that as the CEO of Galaxy Digital, Novogratz put big stakes in the Terra Classic chain native tokens.

The pessimistic stance of Novogratz did not halt the fall-down prophecies for a big chunk of the crypto hedge funds. He continued his doomsday estimates for the cryptocurrency market by claiming that the early signs of the big collapse of the digital currency market have been around for the last six months. Novogratz also claimed that the ongoing collapse wave is a result of the stimulus checks distribution.

Meanwhile, Novogratz told the media last month that cryptocurrency market trends have synched with the financial trends of the NASDAQ index. He also claimed that over time, the correlation between the tech and the crypto market financial co-dependence would start to ease out. All the while, Novogratz maintained that cryptocurrency investors stand to face a few more challenges.