Mike Novogratz reveals why Bitcoin suffered major sell-off

Ex-Goldman Sachs partner and current Galaxy Digital CEO Mike Novogratz has claimed that the recent sell-off has damaged Bitcoin’s “safe haven” reputation.

With global markets sliding on the back of the coronavirus outbreak, many thought that assets like Bitcoin and gold would perform well due to them being common hedges against the traditional financial system.

However, Bitcoin proved to be immune to the mass sell-off as it dropped from $10,500 to $8,750 within a couple of weeks.

Gold also faced a daunting week of uncertainty after rallying to a seven-year high, falling from $1,689/oz to $1564/oz before finding a bounce.

Novogratz, who has championed Bitcoin as a viable investment and hedge for years, took to Twitter to share his view on why the asset commonly described as ‘digital gold’ suffered such a drastic move to the downside.

“How did BTC go from being a hedge against bad stuff to getting washed out and trading like a risk asset? When things go from bad, to very very bad like they did last week, investors take leverage down as fast as they can. They book profits to make up for other losses. Ouch.” He wrote.

His comments mark a significant change of tune from an interview with CNBC on February 14, when he was touting Bitcoin’s use-case as a hedge against the traditional financial system.

“I used to do meetings and have to convince people how Bitcoin worked and whatnot,” he said.

“Now, I talk about this as a weapon in their macro portfolio as a hedge against inflation, as a hedge against easy monetary policy and debasement of fiat currency.”

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