Michael Novogratz and Michael Saylor are two of the most-prominent evangelists of cryptocurrency. They first made his reputation in financial markets and the second in developing technology but both pivoted hard to crypto. Novogratz made a series increasingly-insane headline-grabbing predictions about bitcoin, including price targets of $500,000. Saylor pivoted his software firm MicroStrategy into a levered bitcoin bet with an average cost above $30,000. MicroStrategy's bonds are now pricing in a high chance of default as BTC has fallen below his average cost of $30,000. That could ultimately lead to a dumping of the 129,218 bitcoin that it owns — valued recently at over $6 billion. For Novogratz, there's this: It's now the ultimate cringe. Luna is imploding. It's down to 87-cents from $87 a week ago. It's fallen 97% in the past 24 hours after the luna-backed UST stablecoin broke. Just a week ago, Luna was a top-ten valued crypto. The retail pain is enormous and tragic. In terms of credibility, Novogratz is on a bullet train from respectability to being a punchline. I have to believe Saylor and Novogratz will survive themselves or morph into something new but their pumping has left a trail of wreckage. In the past 24 hours: Bitcoin -8.4% ETH -10.5% XRP -20.2% Cardano -17.9% Solana -25.9% Dogecoin -21.9% Avalanche (aptly named) -36.9% I have to think that bitcoin is being held up by flows from alts at the moment but if $28,500 gives way, it could get very ugly. What's also hurting crypto lately is the positive correlation with tech stocks. There was once a boisterous camp arguing that crypto was a portfolio hedge and store of value against volatility elsewhere. For months though now it's simply been a leveraged trade on the Nasdaq. UBS today makes that point in a brutal one-sentence takedown, saying today that the “case for institutional adoption seems to be receding by the day, with the space affording no safe-haven and only negative diversification via idiosyncratic risks.” Despite all this, I find it strangely comforting that Warren Buffett has won again. It's a reminder that there's nothing new under the sun.
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