(Bloomberg) -- Mike Novogratz, the billionaire founder of Galaxy Digital Holdings Ltd., said cryptocurrencies have been relatively resilient in the past month partly because there aren’t many forced sellers left in the sector.

“We’re in this weird equilibrium where there are a few buyers, there are a few sellers, and there’s not that energy in the market like you’re seeing in the equity market or the bond market where you have to sell, right?” Novogratz said.

A lot of leverage has been taken out of the crypto sector, he added in a discussion with Bloomberg’s Haslinda Amin at a conference in Singapore.

Digital tokens will take off again as soon as the Federal Reserve flinches from its current path of aggressive monetary tightening, but not in a sustainable fashion until mass adoption of Web3 projects, he added.

The term “Web3” refers to a vision of a decentralized internet built around blockchains, crypto’s underlying technology.

Novogratz also said:

  • Many crypto hedge funds won’t survive 2022’s rout in virtual coins
  • Galaxy Digital will probably slow down the pace of hiring
  • The implosion of Do Kwon’s Terraform Labs project was “heartbreaking” and a lesson for the crypto industry
  • Kwon is among the smarter people he’s met and “I wish him well”

Novogratz was a big backer of Terraform Labs. Kwon’s location is unclear and he is the subject of an Interpol red notice in the fallout of the collapse of his Terra ecosytem.

©2022 Bloomberg L.P.